Malaysian palm oil futures closed 1.1 percent lower on Thursday, tracking comparable vegetable oils lower on persistent global economic jitters and crude prices that flirted with one-month lows. The benchmark October contract on the Bursa Malaysia Derivatives Exchange ended at 3,101 ringgit ($1,043) per tonne, but off an earlier low of 3,100 ringgit.
Traded volumes for the contract were 10,163 lots of 25 tonnes each, compared to 9,607 lots on Wednesday. "We have seen a lot of bearish pressure across the board, linked to the big macroeconomic picture in the United States, plus the fact that crude is slightly cheaper," said Abah Ofon, a Singapore-based analyst at Standard Chartered Bank. Indonesia, the world's biggest palm oil producer and exporter, could lower the maximum export tax rate in August. Ofon forecasts second half benchmark prices to average 3,400 ringgit.
In comparable markets, US soybeans for November delivery eased, while the most active May 2012 soyoil on China's Dalian Commodity Exchange also dipped. "Sluggish US soyoil due to a weak global economy and favourable crop weather in US soybean planting regions pressured China's soyoil market," said Zhan Zhi Hong, an oil analyst with Shenzhen-based China Merchant Futures.
"Choppy trade will continue in China's soyoil if US markets fail to set a clear and strong direction," she added. This week, benchmark palm oil prices have been supported by rising export data, leading to a near two-week high of 3,144 ringgit on Thursday. Exports of Malaysian palm oil products for July jumped 13.5 percent to 1,628,688 tonnes, cargo surveyor Societe Generale de Surveillance said on Monday.
Traders say the fasting month of Ramazan will also lead to lower output in Indonesia and Malaysia, the top two global palm producers. On Thursday, a leading agronomist said Southeast Asian palm oil output growth will slow in the second half of 2011 as the impact of El Nino weather conditions from two years ago manifests with lower oil-yielding palm fruits.