Palm oil hits over one-month low

Malaysian palm oil futures fell 1.7 percent to their lowest in more than a month on Monday, tracking weakness in soyaoil on the Chicago Board of Trade (CBOT) and as demand from top consumers China and India weakened. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 1.7 percent at 2,691 ringgit ($640.41) a tonne at the close of trade. It earlier declined to 2,685 ringgit, its lowest since August 21.
The contract registered its biggest intraday percentage drop in one week and a second session of decline. Traded volumes stood at 50,474 lots of 25 tonnes each in the evening. "Demand is tapering off ... buyers are now fully covered. It doesn't look like there will be any more heavy demand from the two prominent buyers, China and India," said a trader from Kuala Lumpur, adding that he expected demand to remain soft until the end of the year.
China and India stocked up this month for mid-Autumn and Diwali festivities in October, which typically see higher consumption of the tropical oil. Malaysia's palm oil shipments for September 1-25 rose by about 15-16 percent from a month earlier, according to cargo surveyors data from Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS).
Shipments for September 1-20 rose 25-26 percent from a month earlier, ITS and SGS data showed. Another trader said palm is likely to drop further on continued weakness in CBOT soyaoil. Palm oil prices are affected by movements in other edible oils, including soya, because they compete for a share of the global vegetable oils market.
The October soyabean oil contract on the Chicago Board of Trade fell 1 percent on Monday, while the January soyabean oil contract on the Dalian Commodity Exchange dropped by 1.1 percent. In related oils, the January palm olein contract declined 0.8 percent.