KUALA LUMPUR: Malaysian palm oil futures eased for a third straight session on Thursday, pressured by profit-taking and position-squaring ahead of official data release, but a weaker ringgit and production constraints underpinned prices.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed down 24 ringgit, or 0.63% to 3,771 ringgit ($902.15) a tonne.
The Malaysian Palm Oil Board is scheduled to release June supply and demand data next week.
The weakening of the ringgit, harvesting constraints and potentially lower end-stocks for July are keeping prices defensive, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Production will remain subdued at least until September unless an immediate solution is found to accelerate harvesting, he added.
Malaysia's peak production months typically happens during the third quarter, but it will likely shift to the fourth quarter this year due to the trees and weather conditions, UOB Kay Hian said in a note.
On the demand front, AmInvestment Bank estimates monthly imports from top buyer India will rise to an average of 850,000 tonnes over the next three months due to lower import duties.
India's demand is expected to ease in the fourth quarter as coronavirus-induced restrictions hurt consumption, AmInvestment Bank said in a note.
Malaysia's key ally in the ruling coalition withdrew support for Prime Minister Muhyiddin Yassin late on Wednesday and called on him to resign for failing to manage the pandemic.
The ringgit, palm's currency of trade, fell 0.48% against the dollar, making the commodity cheaper for holders of foreign currencies.
Soyoil prices on the Chicago Board of Trade fell 1.11%. Dalian's most-active soyoil contract rose 0.8%, while its palm oil contract was up 0.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.