Malaysian palm oil futures on Tuesday snapped four days of gains, as the market corrected lower after a rally ahead of the Lunar New Year holidays, traders said. The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,515 ringgit ($638.81) a tonne at the end of the trading day, its sharpest daily fall since Jan. 25.
The contract hit a one-month peak of 2,555 ringgit in the previous session after the industry regulator, the Malaysian Palm Oil Board, released bullish export data. Malaysian exports in January unexpectedly surged past output levels, rising 6 percent from the previous month to 1.5 million tonnes, the data showed. This reduced stockpiles by nearly 7 percent month-on-month to 2.5 million tonnes.
Trading volumes stood at 31,415 lots of 25 tonnes each at the close of trade. Malaysian markets will be closed on Thursday and Friday for the Lunar New Year holiday, and resume trading on Feb. 19. "The market is seeing a correction after yesterday's rally," said a Kuala Lumpur-based futures trader, adding traders were locking in profit ahead of the holiday.
Slow buying had pulled down the market despite export data showing a rise in demand, another trader said. "The export figures were a surprise as we've been seeing slow activity. Demand doesn't seem to be good," he said.
In related edible oils, the March soyabean oil contract on the Chicago Board of Trade rose 0.1 percent, while May soyabean oil on the Dalian Commodity Exchange climbed 0.3 percent. The Dalian May palm oil contract was up 0.3 percent.
Palm oil prices are impacted by rival edible oils as they compete in the global vegetable oils market.
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