Malaysian crude palm oil futures ended 2.4 percent lower on Wednesday, deepening losses as a sharp decline in exports and rising supplies weighed on the market. The benchmark September contract on the Bursar Malaysian Derivatives Exchange settled down 59 ringgit, or 2.4 percent, at 2,377 ringgit ($693) a tonne.
"Exports are lower as consumers have been delaying purchases because the prices were too high," said a leading trader. "Prices are moving downwards on the perception that production will further outpace demand," another trader said. Palm oil ended 0.9 percent lower on Tuesday as players booked profits a day after the market surged on Indonesia's decision to raise export taxes on the commodity.
Palm oil, used in products ranging from candies and cosmetics to bifocal, is more than 16 percent off a high of 2,764 ringgit reached earlier this month. Other traded months fell between 49 ringgit and 65 ringgit in overall trade of 12,580 lots of 25 tonnes each.
September palm oil on Singapore's Joint Asian Derivatives Exchange was down $9.00 at $701.75 a tonne in light trade. The Kuala Lumpur Plantations Index fell 1.07 percent at 6,149.59 points because of declining palm oil prices. Sector leader IOI Corp Bhd fell 3.54 percent and Asiatic Development Bhd lost 2.33 percent.
Exports of Malaysian palm oil products for June 1-20 fell 15 percent to 661,626 tonnes from 775,979 shipped between May 1 and 20, cargo surveyor Interlake Testing Services said on Wednesday. Another surveyor, Society General de Surveillance, said exports during the period fell 15.5 percent to 675,424 tonnes.
In Malaysia's physical market, crude palm oil for June shipment in the southern region was quoted at 2,520/2,540 ringgit a tonne. Trades were done between 2,530 and 2,540 ringgit.