KUALA LUMPUR, Aug 22: Malaysia’s palm oil market was down on Monday as clear weather helped allay fears of a recurrence of the haze that slowed work on plantations two weeks ago and drove prices up.
I don’t think the haze is going to happen at the moment, so that’s pulled the brakes on any bulls in the market, said a trader.
Weaker prices of US soyaoil also weighed on the market, although September and December delivery of soyaoil was up in Monday’s electronic session of the Chicago Board of Trade.
Palm oil and soyaoil compete for export destinations and their prices often move in step.
Dealers said losses were limited by positive export estimates of palm oil. Trade was light, with most players holding to their positions.
Intertek Testing Services, one of the two surveyors of Malaysian palm oil exports, said it had tracked a shipment of 747,111 tons for August 1 to 20, up 15 per cent from the 651,738 tons it saw for July 1 to 20.
Societe Generale de Surveillance, another exports surveyor more closely watched by the market, estimated a rise of 11.6 per cent for the same period.
At the close, the benchmark third-month crude palm oil contract on Bursa Malaysia Derivatives, November, was down three ringgit at 1,388 ringgit ($370.13) a ton.
The market was up briefly at the open, with November rising two ringgit to hit an intraday high of 1,393. Its low for the day was 1,383.
Other traded contracts ended down one to four ringgit.
Trade volumes totalled 2,939 lots of 25 tons each. The market typically sees 6,000 lots or more on a busy day.
Fears of a drop in production of palm oil due to haze from Indonesian forest fires have kept prices firm since the start of August.
The government declared a brief emergency in two areas in Selangor, a key oil palm producing state next to Kuala Lumpur, earlier this month after skies there were choked by noxious haze. Rains and change in wind directions have cleared the haze since.
In physical dealings of crude palm oil, August contract was offered at 1,385 ringgit a ton and bid at 1,380 in the southern and central regions of Malaysia.
Trades were reported at 1,377.50-1,380 ringgit. —Reuters