KUALA LUMPUR, July 17: Malaysian crude palm oil futures fell 0.9 per cent on Tuesday, pressured by losses in rival soybean oil and rising production. The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell 23 ringgit, or 0.9 per cent to 2,517 ringgit ($731) a ton.
Other traded months fell between 19 and 30 ringgit in overall trade of 11,907 lots of 25 tons each.
Soyabean oil's big fall in the Chicago Board of Trade is pulling down the palm oil market, said a leading trader.
Also, there is talk that production has picked up because plantation companies have reported an increase in fresh fruit bunches in the last 10 days. Malaysia's peak palm harvesting season usually begins in June but this year it has been delayed due to the late arrival of the Southwest monsoon, industry officials said.
Palm oil is nearly 9 per cent off a historic high of 2,764 ringgit reached in early June on the back of robust demand from top importers India and China and dwindling supplies at home.
Chicago Board of Trade soybean futures sank on Monday on a less-threatening weather forecast for crops in the US Midwest.
The soyoil market closed 0.76 to 0.82 cent per lb lower, with August down 0.74 cent at 37.23 cents. In electronic trading during Asian hours on Tuesday, the contract fell a further 0.51 per cent to 37.04 cents per lb.
Malaysian palm oil usually takes its cue from the US soyaoil market because both commodities are used in products ranging from biscuits to lipstick and biodiesel.
October palm oil on Singapore’s Joint Asian Derivatives Exchange was untraded while the November a contract was down $4.50 at $734 per ton in quiet trade.
In the physical market, crude palm oil for July shipment in Malaysia's southern region were quoted at 2,645/2,650 ringgit a ton. Trades were done between 2,650 and 2,670 ringgit.—Reuters
