Palm oil futures tumbled to the lowest in three months on the Malaysia Derivatives Exchange, extending last week’s 6.2 per cent slump, on concern production will increase in the second half.
Investors are awaiting June production, inventory and export data to be released by Malaysian Palm Oil Board on July 10. Stockpiles in Malaysia, the second largest producer, expanded for the first time in six months in May as output surged 8.5 per cent, the biggest on-month increase in a year.
“The market is focused on the production number coming in,” Alvin Tai, a plantation analyst at OSK Research, said by phone from Kuala Lumpur.. “In the next couple of months, it will be quite a significant increase. That is the key factor weighing on the palm oil market.”
Palm oil for September delivery fell 2.1 per cent to RM2,129 a metric ton, the lowest close since April 1.
“We continue to see downside on crude palm oil prices toward the end of the second half of 2009 on the back of supply recovery,” a DBS Vickers Research (Singapore) Pte. report said.
Indonesia, the largest producer, doesn’t issue monthly data. Indonesian producers “can already tell what their production will be like in September and October,” Tai said.
“Whatever they need to sell, they will just sell. Indonesia doesn’t bother keeping inventory. It means Malaysia’s exports will be affected.”
Malaysia’s exports gained 2.3 per cent in May, according to the Palm Oil Board. Preliminary data from independent surveyors shows June exports were little changed.
Exports dropped to 1,227,663 metric tons from 1,227,894 tons in May, according to Societe Generale de Surveillance. Intertek estimates June exports gained 1.6 percent to 1,230,741 tons, from 1,211,716 tons in May.
Palm oil also tracked a decline in prices of other commodities, including crude oil. Crude oil in New York dropped as much as 4.3 per cent to US$63.85 a barrel in Asian trading, and was last at US$64 at 6.09 pm in Singapore. Eighteen of 37 analysts surveyed by Bloomberg News, or 49 percent, said oil futures will decline through July 10.
“If crude oil pulls back, palm oil pulls back even more,” as demand for the vegetable oil as a bio-diesel eases, Tai added.
More Recent Palm Oil News 
- CPO Ends Up On Short Covering; Rising Stocks Cap Gains
- Crude Palm Oil Ends Off Lows On Bargain-Hunting
- Crude Palm Oil Ends Off Highs On Likely Fall In Exports
- Malaysia August Palm Oil Exports Likely Down 14%-15% On Month
- Crude Palm Oil Ends Up On Soyoil, Bullish Forecast
- Analyst Mistry: Palm Oil Prices “Must Rise” To Ration Demand
- Crude Palm Oil Rises 1.8% On Aggressive Short Covering, Soyoil
- Crude Palm Oil Ends 1% Lower On Weak Aug 1-25 Export Data
- CPO Ends Down 2% On Likely Fall In Exports; May Fall More
- Crude Palm Oil Ends Down; Falling Demand, Rising Output
- Crude Palm Oil Ends Lower;Likely Higher Exports Cap Fall
- CPO Falls On Soyoil; Bad Weather In Indonesia May Support
- Crude Palm Oil Ends Down; Stocks To Rise As Exports Fall
- Crude Palm Oil Ends Lower; Price Correction Seen Timely
- Crude Palm Oil Ends Up 1.7% On Chinese Commodities, CBOT Soy
PRO Palm Oil Live Market News
- European Veg Oil PM Palm Oil & Lauric Oil Prices- Sep 2
- European Veg Oil AM Palm Oil & Lauric Oil Prices- Sep 2
- European Veg Oil AM Palm Oil & Lauric Oil Prices- Sep 2
- Census US Fats And Oils: July Production-Sep 2
- Census US Jul Fats And Oils: Consumption-Sep 2
- Census US July Fats And Oils: Stocks-Sep 2
- India Soybean Futures End Down 0.9%, At 5-Week Low
- Indonesian Physical Palm Oil Prices Sep 2
- CPO Ends Up On Short Covering; Rising Stocks Cap Gains
- SUBSCRIBERS: No India Commodity Prices Including Palm Oil – Agriculture Thursday
- Malaysian Cash Market Prices For Palm Oil – Sep 2
- Indonesia’s Astra Agro Sells 4,000 Tons Of CPO Thursday
- BMD Crude Palm Oil (CPO) Futures Off Highs; May Fall More On Imports
- CORRECT: Indonesia PT KPB Sells 2,500 Tons Crude Palm Oil (CPO) At Export Auction Sep 2
- Malaysia August Palm Oil Imports Close To 100,000 Tons -Traders
