Malaysian palm oil futures fell on Tuesday, reversing gains made in early trade, as traders expect high inventories and weak export demand ahead of government data. The February benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange ended the day 0.2 percent lower at 2,339 ringgit ($552.96) per tonne. Traded volume stood at 46,543 lots of 25 tonnes each.
The Malaysian Palm Oil Board numbers are weighing on palm prices, with analysts estimating end-stocks nearing 2.9 million tonnes, said a trader based in Kuala Lumpur, referring to palm oil data from a government body. "Demand is expected to plunge in December, and the availability of crude palm oil is choking the refiners." Palm inventories in Malaysia rose to a near 15-year high of 2.83 million tonnes at end-October. Cargo surveyor data on Monday showed a 10 percent drop in November shipments of palm oil compared with a month ago. In competing vegetable oil markets, the US December soyoil contract and the May soybean oil contract on the Dalian Commodity Exchange gained 1 percent each.
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