VEGOILS-Rising stockpiles weigh on Malaysian palm market

JAKARTA: Malaysian palm oil futures edged lower on Monday after government data showed a higher than expected build up in stocks of the edible oil.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.14 percent at 2,122 ringgit ($519.21) per tonne at the close, after peaking at 2,144 ringgit earlier in the session.

Trading volumes stood at 46,738 lots of 25 tonnes each.

Data from the Malaysian Palm Oil Board (MPOB) showed February palm oil exports fell 21.4 percent month on month to 1.32 million tonnes and output declined 11.1 percent to 1.54 million tonnes. Stocks rose 1.3 percent to 3.04 million tonnes, higher than expected.

"Surprisingly higher stocks contributed to the plunge but the strong buying emerging at the lows also suggests that the market is not extremely bearish on the high stocks," said one Kuala Lumpur-based trader.

"We need good exports to bring down the stocks," the trader said, adding that March data was expected to be more promising than last month.

In other related oils, the Chicago May soybean oil contract was last down 0.34 percent.

The Dalian May palm oil contract dipped 0.26 percent.

Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.