KUALA LUMPUR: Malaysian palm oil futures saw a second session of declines in four on Wednesday, slipping to a near two month low on forecasts for rising output and falling export demand, traders said.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 1.8 percent at 2,455 ringgit ($576.43) a tonne at the close of trade, its sharpest daily fall in over a week.
Palm futures shed early gains and closed flat in the previous session. They are down 1.7 percent for the week, in line for a fourth straight week of declines.
Traded volumes stood at 52,516 lots of 25 tonnes each in the evening.
"Market is down as production figures are coming up quite strongly," said a futures trader from Kuala Lumpur. "Exports for the months of June and July are bad, as demand comes off after Ramadan."
Palm oil output in Malaysia, the world's second-largest producer of the tropical oil, is seen gaining in the second half of this year on seasonal demand and as it recovers from the crop-damaging effects of El Nino.
May production likely rose 5.5 percent to 1.63 million tonnes from the previous month, according to a Reuters survey of planters, traders and analysts.
The survey showed exports in May jumped 13.6 percent month-on-month to 1.46 million tonnes due to Ramadan demand.
The holy festival, which began late May this year, sees many Muslims break day-long fasts with communal feasting. Palm oil is commonly used as cooking oil or an ingredient.
However, palm oil shipments are seen falling after the festive season of Eid-al-Fitr, the holiday that marks the end of the fasting period, on less consumption and lower demand for the tropical oil.
In other related oils, soybean oil on the Chicago Board of Trade fell 0.2 percent, while the September soybean oil contract on the Dalian Commodity Exchange gained 0.3 percent.
The September contract for palm olein slid as much as 1.2 percent.
Palm oil prices are typically impacted by the performance of related edible oils, as they compete for a share in the global vegetable oils market.
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