Malaysian palm oil rebounds

Malaysian palm oil futures snapped five days of losses on Monday, pulling back from a more than one-month low earlier in the session on hopes for higher overseas demand, although concerns about rising stock levels weighed. "Exports for the first ten days were good, and the figures for the first half of this month should be better than last month," said a trader with a foreign brokerage in Kuala Lumpur, referring to export data due for release on Wednesday.
Cargo surveyor Societe Generale de Surveillance last week said exports of Malaysian palm oil products for June 1-10 rose as much as 27.2 percent to 411,852 tonnes from one month ago. The benchmark August crude palm oil contract on Bursa Malaysia Derivatives Exchange rose half a percent to 3,256 ringgit ($1,077.79) per tonne, after reversing losses from 3,199 ringgit hit earlier in the day - a level unseen since May 9.
Palm oil, which lost 5.3 percent last week, was pressured by data that showed stocks in Malaysia in May rose 15 percent from April to a 16-month high of 1.92 million tonnes. Overall traded volume was 24,692 lots of 25 tonnes each, from the usual 25,000 lots. Palm oil was pressured by talk that Indonesia could reduce its palm oil export tariff. The palm oil tax aims to ensure domestic requirements are met in the world's No 1 producer and to reduce volatility in local cooking oil prices.
A lower export tax compared with the current 17.5 percent level could see Malaysian refiners buy more in anticipation of stronger demand ahead of Ramadan, which is due to start in August. "If the export tax is lowered in July we may see more imports to Malaysia," said another trader in Kuala Lumpur. "The Indonesian government will have to adjust its crude palm oil base price or tax structure in order to keep its market share."
Crude oil dipped on Monday as increasing signs of global economic slowdown prompted risk aversion, dragging on some vegetable oils. US soyoil for July delivery was barely moved in Asian trade, while the most active January soyoil contract on China's Dalian Commodity Exchange closed 0.3 percent lower.
"China's commodities and stocks were pressured by a weak global economic outlook and expectations that China's May inflation rate will increase," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchant Futures. A Reuters poll showed China's consumer price index (CPI) in May have accelerated to 5.4 percent, from 5.3 percent in April.