Malaysian palm oil futures extended losses for a second day on Monday, tracking declines in competing markets, while data showing an increase in shipments from Malaysia in June and a new Indonesian export levy provided little support. "Our palm movement is mostly driven by external influences. When soybean oil eased, we also eased in tandem," said a palm trader with a foreign commodities brokerage in Kuala Lumpur, referring to soybean oil contracts on the US Chicago Board of Trade and China's Dalian Commodity Exchange.
The market was still trading in a range, with a support level at 2,230 ringgit, the trader added. The August palm oil contract on the Bursa Malaysia Derivatives exchange was down 0.5 percent at 2,266 ringgit ($602.82) a tonne by the day's close. Total traded volume was light at 30,135 lots of 25 tonnes each, below the more usual 35,000 lots.
The contract has fallen on five of the past six days, but was holding above Friday's trough of 2,254 ringgit, its lowest level in two weeks. Exports of palm oil products from the world's second-biggest producer for June 1-15 rose 5.8 percent to 780,387 tonnes from 737,308 tonnes shipped during May 1-15, cargo surveyor Intertek Testing Services said on Monday.
Another cargo surveyor Societe Generale de Surveillance reported exports for the same period rose 6.7 percent. Indonesia, the world's top exporter of the edible oil, has once again delayed the implementation date for its planned levy on crude palm oil exports to July 1 from June 15 due to administrative issues, Co-ordinating Minister of Economic Affairs Sofyan Djalil told reporters on Monday.
On Friday, the minister said the country will begin imposing a $50 per tonne levy on crude palm oil and $30 for processed palm products exports from Monday. The regulation, announced in late March, will fund recently announced biodiesel subsidies and could underpin palm prices if biodiesel demand picks up. "Everyone is waiting to see how they're going to implement it," the trader said. "The levy is supposed to have a positive impact on prices, that's one of the reasons why the selling pressure will be capped."
Another trader, Lingam Supramaniam, director at Malaysian-based commodities firm Pelindung Bestari, added: "Most (traders) say it could be postponed again." A rally that took palm prices to three-month highs earlier in June may run out of steam as buying ahead of the Muslim festival of Ramadan fades and markets brace for growing supply as the main harvest approaches, traders and analysts said. In other markets, oil prices steadied on Monday as a storm that could impact the Gulf of Mexico raised concerns over US production but talks in Geneva offered a chance for peace in Yemen where top crude exporter Saudi Arabia has been involved in a civil war. In competing vegetable oil markets, the US July soyoil contract slipped 1.0 percent in late Asian trade, while the most active September soybean oil contract on the Dalian Commodity Exchange fell 0.7 percent.