Malaysian palm oil futures dropped for a third consecutive trading day yesterday as lower-than-expected June palm oil exports sparked fears over the outlook for demand, traders said.
The benchmark September palm oil contract on the Bursa Malaysia Derivatives Exchange lost RM32, or 1.4 per cent, to RM2,230
a tonne. Overall traded volume was 13,879 lots at 25 tonnes each.
The benchmark contract lost 12.9 per cent in June, its biggest monthly fall since last October.
Exports of Malaysian palm oil products for June were nearly flat at 1,227,663 tonnes compared to 1,227,894 tonnes shipped in May, cargo surveyor Societe Generale de Surveillance said yesterday.
Another cargo surveyor Intertek Testing Services estimated June exports at 1,230,741 tonnes against 1,211,716 tonnes in May.
“Exports were below what the market had expected. On Monday people expected 1.25 million tonnes,” said a trader at Kuala Lumpur-based commodities brokerage, adding that the market had already steadily cut its expectations.
The market is now anticipating a bigger increase in end-June Malaysian palm oil stocks due to lower-than-expected exports.
“Definitely, (end-June) stocks will pick up even if exports hit 1.3 million tonnes. I think the stock will be about 7 per cent higher,” the Kuala Lumpur-based brokerage trader said. Palm prices correlate inversely with palm oil stocks.
In the Malaysian palm oil physical market, the bid and ask prices for June/July delivery were quoted at RM2,240/2,270 in the southern region, and at RM2,240/2,260 in the central region. Trades were done at RM2,250 in the central region.
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