Malaysian palm oil futures fell on Thursday, giving up gains in early trade to fall in nine out of 10 sessions as worries about dwindling demand and losses in overseas soy markets weighed. The benchmark August contract on the Bursa Malaysia Derivatives Exchange had touched a near one-week high of 2,449 ringgit before settling lower at 2,416 ringgit ($749) per tonne by the day's close, down 0.7 percent.
Market players say the slower export growth in the second half of May has fuelled concerns that demand for the tropical oil will continue to slacken in June, adding pressure on prices which have lost nearly 10 percent this year. "In the last five days of May we already started seeing poor exports. So, we are expecting nothing great in the first 10 days of June," said a trader with a local commodities brokerage in Kuala Lumpur.
Total traded volume stood at 30,534 lots of 25 tonnes on Thursday, below the usual 35,000 lots as some investors stayed on the sidelines and avoided risky bets for now. A Reuters survey on Thursday showed that Malaysian palm oil stocks at end-May likely edged up 2.4 percent to a four-month high of 1.81 million tonnes, as a rise in production outstripped export demand for the tropical oil. Export data on shipments of Malaysian palm products between June 1 and 10 will be released by cargo surveyors next Tuesday, alongside industry data on Malaysia's end-May palm stocks, output and exports.
Cargo surveyor data earlier this week showed that Malaysian palm exports were 8-9 percent higher in May from a month ago. The rise, however, was slower compared to a 23 percent jump recorded for the May 1-15 period as export demand fizzled out in the second half of the month. In competing vegetable oil markets, the US soyoil contract for July shed 0.8 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodities Exchange rose 0.6 percent.