Malaysian palm oil futures reversed earlier gains to fall over 1 percent in evening trade on Tuesday, as output declines remained slower than in previous years and stocks in key buying markets stayed high. Palm had earlier gained as much as 1.1 percent, hitting its highest in over a week as it tracked strength in US soyaoil prices and a weaker ringgit.
Losses in the ringgit, palm's currency of trade, usually make the vegetable oil cheaper for holders of foreign currencies. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,260 ringgit ($553.92) a tonne at the close of trade.
Earlier in the session it climbed as much as 1.1 percent to 2,311 ringgit, its highest since Feb. 8. Trading volumes stood at 44,707 lots of 25 tonnes each in the evening. A Singapore-based trader said the market was falling on a slower-than-historical output decline, and that stocks in key markets were still at elevated levels.
"Stocks in Pakistan, India, China and Europe are mostly high," he said. Earlier in the day another trader reported that the market had been benefiting from expectations of supportive cargo surveyor export data for Feb. 1-20. Exports from Malaysia during Feb. 1-15 rose between 4.2-12.9 percent from a month earlier, according to cargo surveyors.
The surveyors are scheduled to release export data for the Feb. 1-20 period on Wednesday. In other related oils, the Chicago March soyabean oil contract was up 0.2 percent on Tuesday. The May soyaoil contract on the Dalian Commodity Exchange rose 1.2 percent, while the Dalian May palm oil contract also added 1.2 percent. Palm oil prices are affected by movements in soyaoil, as they compete for a share in the global vegetable oil market.
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