KUALA LUMPUR: Malaysian palm oil futures dropped nearly 5% to a more than five-week low on Wednesday, dragged down by expectations of rising palm oil supply and lower partial export data estimates.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed down 191 ringgit, or 4.72%, to 3,858 ringgit ($937.32) a tonne.
Palm fell for a third consecutive day to its lowest closing since April 30.
“Market continued to remain volatile despite a firmer close in competing vegetable oils,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“Worries about June demand and the perceived build up in end-stocks capped the market today.”
Market rumours have estimated Malaysia’s exports during June 1-10 to decline 15% from the month earlier.
Meanwhile, Malaysia’s end-May palm oil stockpiles likely expanded 6.3% month-on-month to 1.64 million tonnes, while production is seen rising 3.4% to 1.58 million tonnes, a Reuters survey showed on Friday.
Investors are now awaiting the Malaysian Palm Oil Board’s May supply and demand data, and cargo surveyors’ June 1-10 export data, both due on Thursday.
Dalian’s most-active soyaoil contract slipped 1.8%, while its palm oil contract fell 2%.
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