KUALA LUMPUR: Malaysian palm oil futures ended lower for a second session on Thursday, hitting a near one-week low on concerns over rising supply in the world’s top producers and losses in rival Dalian oils.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed down 105 ringgit, or 2.83%, to 3,604 ringgit ($812.63) a tonne, its lowest since May 5.
Malaysia’s end-April palm oil inventories slumped to their lowest in 11 months, after production and exports plunged more than anticipated, data from the country’s palm oil board showed on Wednesday.
However, brokerage UOB Kay Hian said inventories in the world’s second-largest producer will start increasing from May onwards despite weak production.
“This is mainly due to subdued palm oil exports owing to the comparatively lower prices offered by Indonesian peers and soft oils being traded at more attractive prices at destination markets, which will exert ongoing pressure on palm oil demand,” the brokerage said.
Exports from Malaysia for May 1-10 rose 10.03% from the previous month, cargo surveyor Intertek Testing Services said on Wednesday. Another cargo surveyor, Amspec Agri, said exports rose 1.7%.
Traders and analysts said they are also anticipating production in larger grower Indonesia to see a big jump in May.
India on Thursday clarified that duty-free imports of soyoil and sunflower oil shipped before March 31 would be allowed until the end of June, after hundreds of thousands of cargoes were stuck at ports over confusion over import rules.
In related oils, Dalian’s most-active soyoil contract fell 3.2%, while its palm oil contract was down 3.6%.
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