KUALA LUMPUR, Sept 4: Malaysian crude palm oil futures slipped on Tuesday as worries about rising supplies were rekindled and as dealers booked profits after the market hit a three-week high in the morning session.

The benchmark November contract on the Bursa Malaysia Derivatives Exchange settled down 15 ringgit, or 0.6 per cent, at 2,459 ringgit ($701) a ton, after going as high as 2,501 ringgit in the morning session, a level not seen since August 13.

Profit-taking is taking place as the market was rising since last week until concrete plans on the Indonesian export taxes were announced, said a leading trader. It’s a case of buy on rumour and sell on fact. Other traded months fell between 10 and 28 ringgit, except the May 2008 contract which was unchanged. Overall volume stood at 10,710 lots of 25 tons each.

Indonesia has adjusted the base export prices for palm oil products to bring them in line with international prices, the trade ministry said on Monday.

The government also introduced new export taxes for palm oil products in an effort to stabilise domestic cooking oil prices. Palm oil, used in products ranging from confectionery and cosmetics to biofuels, is around 11 per cent below an historic high of 2,764 ringgit reached in June.

Exports have been very kind in the past one month and it should be going higher but production is expected to jump, which would result in a possible supply glut, said another trader.

Asian vegetable oil demand has picked up from July as buyers from the Middle East to China lock in supplies for the festive season, especially for the holy month of Ramazan and the Chinese mid-Autumn festival, both due this month.

Malaysia’s August palm oil exports rose 14 per cent to 1,236,540 tons from 1,084,062 tons shipped in July, cargo surveyor Intertek Testing Services said on Saturday. Another cargo surveyor, Societe Generale de Surveillance, said exports in the same period rose 15.9 per cent to 1,264,422 tons.

But the Southeast Asian country’s palm oil reserves in August are expected to rise as much as 20 per cent due to the current seasonal uptick in production.

November palm oil on Singapore’s Joint Asian Derivatives Exchange fell $3 to $712 a ton with only 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. Trades were done between 2,525 and 2,545 ringgit.—Reuters