KUALA LUMPUR: Malaysian palm oil futures retreated on Tuesday to clock their fourth straight monthly decline, weighed down by growing expectations of an improvement in production.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange ended down 41 ringgit, or 0.98%, at 4,133 ringgit ($923.78) a tonne. Palm lost 3.6% this month.
Bursa Malaysia will be closed on Wednesday for a public holiday.
“In the month of September, all eyes will be on Malaysian production numbers,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Palm output in the world’s second-largest producer is expected to rise as plantations enter the peak production months, but exports are likely to slow due to competitive pricing in larger rival Indonesia, he added.
Top producer Indonesia extended an export levy waiver until Oct. 31 to maintain price stability, but raised its crude palm oil reference price for the Sept. 1-15 period.
Indonesia waiving levy indicates a need to move supplies as the pace of production picks up, Paramalingam added.
In related oils, Dalian’s most-active soyoil contract fell 1.1%, while its palm oil contract dropped 1.3%. Soyoil prices on the Chicago Board of Trade slipped 1.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.