KUALA LUMPUR: Palm oil futures ticked lower on Tuesday, dropping for the first time in seven sessions after data showed Malaysian palm oil inventories fell less than expected last month while exports slid.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 0.1 per cent to 2,900 ringgit ($695.44) at the end of the morning session.
The market had earlier risen to its highest since February 2017 at 2,929 ringgit a tonne. Malaysia’s palm oil inventories fell to a three-month low in November as a seasonal decline in production curbed yields in the world’s second-biggest producer, while exports dropped on slowing purchases by top importers.
Stockpiles slid to 2.26 million tonnes, down 4.1pc from the previous month, industry regulator the Malaysian Palm Oil Board (MPOB) said on Tuesday. This compared with a Reuters survey forecasting reserves to drop 5.7pc to 2.22 million tonnes. Exports of Malaysian palm oil products for December 1-10 fell 11.3pc from a month ago, according to an independent inspection company AmSpec Agri Malaysia.
“Considering the heavily overdone price levels versus lower demand by around 12pc in December, it seems reasonable that prices retrace to more realistic levels,” said Marcello Cultrera, institutional sales manager at Phillip Futures in Kuala Lumpur.
Published in Dawn, December 11th, 2019
