JAKARTA: Malaysia’s benchmark palm oil futures dropped on Thursday after a four day rally, despite supportive Aug. 1-25 export data, as traders booked profit.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange traded 1.23% lower to 4,255 ringgit ($951.90) a tonne by end of afternoon session. The contract gained 6.64% in the previous four sessions.
Cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri estimated exports of Malaysian palm oil products for Aug. 1-25 were up between 4.9% and 10%, while cargo surveyor Societe Generale de Surveillance reported exports fell 0.1%.
“The export data is supportive and within expectation, so what is happening is trader taking profit on bullish fact,” a trader in Kuala Lumpur said.
Traders said production may have risen sharply during this period.
Soyoil prices on the Chicago Board of Trade were up 0.12%, while Dalian’s soyoil contract gained 0.85% and its palm oil contract rose 0.27%. Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
Top palm oil producer Indonesia has extended a policy of not collecting levies for palm oil exports to Oct. 31, Trade Minister Zulkifli Hasan said on Wednesday, amid efforts to encourage exports and prop up farmers’ prices for fresh palm oil.
Palm oil looks neutral in a range of 4,085-4,350 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.