SINGAPORE: Exports of Malaysian palm oil products for April fell 5.6 percent to 1,292,371 tonnes, compared with 1,368,426 tonnes shipped during March, cargo surveyor Societe Generale de Surveillance said on late Tuesday.
Reuters also reported that Malaysian palm oil futures edged higher on Tuesday after a near 2 percent loss the previous day, but gains were limited by falling exports and investor caution ahead of a holiday.
Malaysian exports of palm oil products dropped 4.3 percent to 1,305,120 tonnes in April from a month ago, cargo surveyor Intertek Testing Services said on Tuesday.
Trading was subdued as investors avoided taking positions ahead of the Labour Day holiday on Wednesday, with the market shifting its focus to Malaysia’s palm stocks level in April.
“The market is stagnant ahead of the holiday tomorrow and the exports were no surprise,” said a dealer with a foreign commodities brokerage in Kuala Lumpur.
“Production numbers will be eyed. Stocks will likely be marginally lower and that could pressure prices as people are expecting a sharper drop.”
By the market close, the benchmark July contract on the Bursa Malaysia Derivatives Exchange had gained 0.6 percent to 2,286 ringgit ($752) per tonne, supported by bargain-hunting after prices fell as much as 2.4 percent the day before.
Total traded volumes were thin at 27,106 lots of 25 tonnes each compared to the average 35,000 lots a day seen so far this year.
Technicals showed palm oil is expected to revisit its April 26 high of 2,334 ringgit per tonne, said Reuters market analyst Wang Tao.
With exports slowing compared to a month ago, investors are now turning their hopes to near-stagnant production to help cut stockpiles in Malaysia.
Inventory at the world’s second-largest producer of the edible oil stood at 2.17 million tonnes in March, down from February’s 2.43 million tonnes.
Export demand may take a further hit as Indonesia’s move to slash its crude palm oil export tax to 9 percent in May from April’s 10.5 percent could hurt Malaysia’s price competitiveness, analysts said.
“Even though (Indonesia’s tax) is still higher than the 4.5 percent imposed by the Malaysian government, the cut heightened concerns that palm oil stocks may remain high,” Malaysia’s Affin Investment Banksaid in a note to clients on Tuesday.
In other markets, Brent oil fell towards $103 per barrel on Tuesday, weighed by worries about the demand outlook, though losses were capped on hopes that the U.S. Federal Reserve and European Central Bank may do more to stimulate the global economy.
In vegetable oil markets, U.S. soyoil for July delivery edged up 0.1 percent in late Asian trading.
The Dalian Commodities Exchange is closed for Labour Day and will only resume trading on Thursday. – Reuters
Source : The Star
