KUALA LUMPUR: Malaysian palm oil futures slid on Tuesday as export growth slowed and the market took a chance to take profits amid mounting production concerns.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 1.2 percent at 2,485 ringgit ($636.85) a tonne, reversing Monday's gains to its lowest since Feb. 9.
Trading volumes stood at 37,006 lots of 25 tonnes each.
Positive export numbers did little to boost market confidence and the market could have viewed them as an opportunity to take profit, traders said.
"Exports are slowing slightly, compared to earlier this month when the numbers were up nearly 15 percent in the first ten days of February," said a Kuala Lumpur-based trader, referring to cargo surveyor Intertek Testing Services' (ITS) data.
Exports of Malaysian palm oil products for the Feb. 1-20 period rose 8.8 percent to 791,992 tonnes from the 727,958 tonnes shipped a month ago, ITS said on Tuesday.
For the same period, cargo surveyor Societe Generale de Surveillance reported that Malaysian palm oil products exports rose 9.5 percent to 815,183 tonnes from 744,706 tonnes shipped during Jan. 1-20.
The market's attention will shift towards production figures due this Thursday, the trader added.
Another trader said that expectations of unfavourable production numbers added pressure and hence the market is profit taking awaiting fresh cues.
"Higher production is expected, but to what extent will be the deciding factor. The market will track Malaysian Palm Oil Association's input (on Thursday)," the trader added.
The Chicago Board of Trade's March soybean oil contract rose 0.4 percent, while China's Dalian Commodity Exchange remains closed for the Lunar New Year celebrations and will reopen on Thursday.
Palm oil prices are impacted by other rival edible oils as they compete for a share in the global vegetable oils market.
Palm oil looks neutral in a narrow range of 2,486-2,518 ringgit per tonne, although the bias could be towards the upside, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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