Malaysian crude palm oil futures slipped on Thursday as a delay in a second bailout package for Greece raised investors' concerns, although losses were limited thanks to dry weather fears in soy-producing South America. Prospects of lower supply in soybean due to dry weather in Brazil provided some support for palm oil that competes with soyoil for use in biofuels and food.
Slowing exports for Malaysian palm oil and uncertainty in Europe, a major palm oil consumer, has weighed on the futures market that has edged higher so far this year. "The recent exports data showed that exports for the first 15 days are not that strong but I suspect that this could be due to the delay in the issuance of tax-free crude palm oil quota," said Ivy Ng, an analyst with Malaysia's CIMB Investment Bank.
Benchmark May palm oil futures on the Bursa Malaysia Derivatives Exchange eased 0.4 percent to close at 3,189 ringgit ($1,043) per tonne. Prices hit a high of 3,213 ringgit on Wednesday, a level last seen on January 12. Traded volumes stood at 28,778 lots of 25 tonnes each, higher than the usual 25,000 lots for the first time this week.
Reuters market analyst Wang Tao said palm oil will retrace to 3,118 ringgit per tonne, as a rebound from the February 2 low of 3,036 ringgit has completed. In signs of slowing demand, cargo surveyor Intertek Testing Services said Malaysian palm oil exports from February 1 to 15 fell 14 percent to 509,107 tonnes from a month ago.
That was a higher quantum compared to the first ten days of February when exports fell by 4.3 percent comapred to the same period a month ago. But crude palm oil demand picked up, which market players attributed to the tax-free export quotas of 3 million tonnes that were issued early this February after weeks of delay. The most active September 2012 soyoil contract, on China's Dalian Commodity exchange dropped 0.8 percent.
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