KUALA LUMPUR, June 11: Malaysian crude palm oil futures plunged more than 6 per cent on Monday, hit by a sharp decline in exports that triggered a sell-off for the second straight day.
The market has lost more than 16 per cent since it hit record highs last week on booming demand and a squeeze in supplies, and players said the fall could mark the end of an uptrend.
It's a bloodbath, said a leading trader. It certainly has to do with lower exports and no one knows where the market will settle.
The benchmark August contract on the Bursa Malaysia Derivatives finished down 151 ringgit or 6.1 per cent at 2,320 ringgit ($668) a ton. The current month June contract registered the sharpest decline, falling 8.6 per cent.
Sinking palm oil also pulled down Malaysia's plantation index by 0.2 per cent, with sector leaders Kuala Lumpur Kepong and Golden Hope losing steam.
Palm oil, used mainly as a cooking oil but also in products ranging from cosmetics to biodiesel, is still up more than 16 per cent since January. It surged 40 per cent last year due to demand from the food and biodiesel sectors.
Other traded months fell between 53 and 232 ringgit. Overall volume more than doubled to 25,324 lots of 25 tons each.
Exports of Malaysian palm oil products for June 1 to 10 fell 27 per cent to 339,117 tons from 463,865 tons shipped between May 1 and 10, cargo surveyor Intertek Testing Services said on Monday.
Another cargo surveyor, Societe General de Surveillance, said exports during the period fell 23.5 per cent to 345,849 tons.
Malaysia's crude palm oil output rose 6.71 per cent to 1,201,255 tons in May from 1,125,726 tons in April, official crop agency Malaysian Palm Oil Board said.
In Malaysia's physical market, crude palm oil for June shipment was quoted at 2,470/2,500 ringgit a ton. Trades were done between 2,550 and 2,600 ringgit.
