KUALA LUMPUR, July 9: Malaysian crude palm oil futures edged 0.4 per cent lower on Monday on anxieties that demand from key buyers was weakening due to high prices. Losses were deepened by expectations of an increase in palm oil reserves as the peak harvesting season kicks off in July, dealers said.
The benchmark September contract on the Bursa Malaysia Derivatives Exchange settled down 11 ringgit, or 0.4 percent to 2,509 ringgit ($730) a tonne, after reaching an intraday low of 2,484 ringgit.
There is talk that exports for the first ten days of July have not bounced back as expected and the market is quickly factoring this in, said one trader.
Industry officials earlier said demand should pick up from July as nations from South Asia to the Middle East lock in supplies for the Muslim fasting month of Ramazan which is due in September.
Coupled with rising supplies, the market is set to go lower, said another trader.
Dealers said exports for July 1-10 could range between 350,000 and 380,000 tonnes, around the same as during a month earlier period.
Malaysian palm oil stocks climbed 6.3 per cent in June as declining exports and a steady increase in production pushed up supplies, a Reuters poll showed on Monday.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will release export data for July 1-10 on Tuesday. Separate figures from the Malaysia Palm Oil Board for exports, stocks and output in June will be released on the same day.
Other traded months fell between 13 and 24 ringgit in overall trade of 8,618 lots of 25 tons each.
Palm oil is around 9 per cent off a historic high of 2,764 ringgit reached in June as fears of swelling stocks due to weakening exports persist.
September palm oil on Singapore's Joint Asian Derivatives Exchange was untraded with the October contract marginally lower and the distant months higher in lacklustre trade.
In Malaysia's physical market, crude palm oil for July shipment in southern region was quoted at 2,615/2,620 ringgit a ton. Trades were done between 2,620 and 2,630 ringgit.—Reuters
