KUALA LUMPUR: Malaysian palm oil futures declined more than 1% on Monday, after palm posted its best week in two decades, as Malaysian Palm Oil Board (MPOB) data showed higher-than-expected April supply.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed 62 ringgit lower, or 1.4%, to 4,365 ringgit ($1,063.34) a tonne, snapping a sharp two-session rally.
Malaysia’s end-April palm oil inventories rose 7.1% month-on-month to a five-month high of 1.55 million tonnes, as production grew for a second consecutive month, MPOB data showed.
Stockpiles outpaced estimates by 4% to 7%, while exports were in line, but lower domestic consumption of just 191,000 tonnes was a key surprise, said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
MPOB’s data showed domestic consumption was at least 50,000 tonnes lower compared to market estimates of 240,000 tonnes to 362,000 tonnes, he said.
Malaysia’s exports during May 1 to 10 rose between 29.6% and 36.8% from the same period in April, according to data released by cargo suveyors.
The contract will likely continue its upward momentum this week, led by an overwhelmingly bullish sentiment in the broader edible oil markets, particularly soyabean oil futures on the Chicago Board of Trade and palm futures on the China Dalian Commodity Exchange, Refinitiv Agriculture Research said in a note.
Dalian’s most-active soyaoil contract fell 1% and its palm oil contract declined 0.03%. Soyaoil prices on the Chicago Board of Trade were down 0.8%.—Reuters