KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday to their lowest in nearly two weeks in the second half of trade, tracking losses in US soyoil and on weak export demand. Also, weighing on sentiment was weakness in the Indian rupee, which has made imports expensive for local buyers in the South Asian nation.
This will hurt palm oil export demand in Malaysia as India is the world’s biggest importer of edible oils. The rupee fell to a record low of more than 70 per dollar on Tuesday, amid concerns about Turkey’s economic woes spreading to other emerging markets such as India. Indian markets were closed on Wednesday for a holiday.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.8 per cent at 2,195 ringgit ($535.10) a tonne at the close of trade. Palm earlier fell to an intraday low of 2,192 ringgit, its weakest since Aug 3. Trading volumes stood at 47,322 lots of 25 tonnes each.
“There is also very low demand for the month of August which I expect to go lower,” said a Kuala Lumpur-based trader. Malaysia’s palm oil shipments in the first half of August also slid, with inspection company AmSpec Agri Malaysia reporting a 14.6pc decline in exports from a month earlier.
Cargo surveyor Societe Generale de Surveillance reported a 11.1pc decline in Malaysian exports for the same period.
Published in Dawn, August 16th, 2018