KUALA LUMPUR, June 26: Persistent talk that main buyers such as India, China and Pakistan are slowing down their edible oil intake sparked technical correction in Malaysia’s crude palm oil futures on Wednesday.

It’s all about technical correction. I am putting the next support level at 1,340 ringgit, said one trader. It seems that India, China and Pakistan are taking a break, he added.

At the close, the benchmark third-month September contract was 31 ringgit lower at 1,361 ringgit ($358.16) a ton after trading as high as 1,395 ringgit.

Volume was heavy at 3,722 lots while open interest remained at an all-time high at 17,719 contracts.

Traders said such high open interest showed that speculators were in control of the market, where a variety of talk such as hefty Chinese buying in one single day to Indonesia offering heavy discount to its crude palm oil emerges on a daily basis.

Some said poor market fundamentals would justify further declines in the market as production was expected to pick up from July onwards while exports subsided.

On Tuesday, cargo surveyor SGS shocked players when it announced June 1-25 exports only totalled 702,750 tons and not 800,000 tons as expected. SGS put May 1-25 exports at 800,578 tons.

Private forecaster Ivan Wong put July palm oil output at 1.01 million tons, up from 960,000-965,000 tons in June.

Kuala Lumpur traders discounted news that India, the world’s largest edible oil importer, could step up palm oil purchases for July arrival from Malaysia and Indonesia as import commitments so far have been lower than normal.

Several traders in India said they have waited till the last minute to complete their purchases for July, hoping that global prices would fall.

Import commitments for July arrival were so far only about 60,000-90,000 tons. India would normally have purchased nearly half of its July palm oil requirement, estimated at 250,000-300,000 tons, by now, traders said.

In the physical market, June/July for the southern and regions saw bids at 1,390.50 ringgit a ton, against sale offers at 1,400 ringgit.

Trades were reported at 1,395 to 1,400 ringgit a ton for June/July (south)

June/July (central) was offered at 1,400 ringgit against bids of 1,390 ringgit. No deals were reported.—Reuters