KUALA LUMPUR, Sept 6: Malaysian crude palm oil futures ended one per cent lower in quiet trade on Thursday as fears of rising supplies due to a seasonal peak in production weighed on the market.
Losses were pared by strong prices of rival soybean oil on the Chicago Board of Trade, dealers said.
The benchmark November contract on the Bursa Malaysia Derivatives Exchange finished down 25 ringgit, or 1 per cent, to 2,470 ringgit ($705) a ton.
On one hand, the market is getting support from the strong soyaoil prices but at the back of every player’s mind is the fear that end-stock is going to shoot up because production is on the overdrive, said one trader.
The market has been overpriced since the day before and right now there will be a subtle shift from external factors like soyaoil to the current demand-supply fundamentals, another trader said.
Other traded months fell between 14 and 35 ringgit. Overall volume nearly halved to 5,681 lots of 25 tons each from around 10,000 lots that usually change hands on a routine trading day.
Palm oil, used in products ranging from confectioneries and cosmetics to biofuels is nearly 11 per cent off an historic high of 2,764 ringgit reached in June.
Traders expect palm oil reserves in August to swell as much as 20 per cent despite strong demand as the seasonal uptick in production is currently underway.
November palm oil on Singapore’s Joint Asian Derivatives Exchange was untraded with distant January contract moving lower by 1030 GMT with just one lot traded.
In the physical market, crude palm oil for September shipments in Malaysia’s southern region was quoted at 2,520/2,530 ringgit a ton.—Reuters
