Malaysian palm oil futures fell on Tuesday, snapping a three-day rising streak, hurt by a stronger ringgit and sluggish export demand. The palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.5 percent at 2,536 ringgit ($608.88) per tonne at the end of the trading day. Traded volume stood at 49,228 lots of 25 tonnes each.
"Currency is the main factor, but exports were also not very good," said a trader based in Kuala Lumpur, referring to export data from cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS). He said buying activity was slow on Tuesday as most traders were waiting for clarity on palm industry indicators from analysts and industry experts at the Palm and Lauric Oils Outlook Conference in Kuala Lumpur from March 7-9.
The ringgit, the currency in which palm futures are traded, strengthened 0.8 percent to 4.1650 against the dollar late on Tuesday. A stronger ringgit makes the vegetable oil more expensive for holders of foreign currencies.
Palm oil shipments fell 17-18 percent for the month of February from a month earlier, data from cargo surveyors SGS and ITS showed. Palm oil shipments from Malaysia, the world's second largest producer of the tropical oil, have been falling in recent weeks as demand from top consumers China, India and Europe wanes. Palm oil may break a support at 2,519 ringgit per tonne and fall towards the next support at 2,481 ringgit, said Reuters market analyst for commodities and energy technicals Wang Tao.
In competing vegetable oil markets, the May soybean oil contract on the Dalian Commodity Exchange fell 0.35 percent, while the Chicago soyoil contract rose 0.40 percent.
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