KUALA LUMPUR, July 19: Malaysian crude palm oil futures fell 1.7 per cent on Thursday, weighed down by a drop in rival soybean oil prices and worries that exports may not pick up this month as widely expected.
The benchmark October contract on the Bursa Malaysia Derivatives Exchange settled down 43 ringgit, or 1.7 per cent, at 2,485 ringgit ($723) a ton.
“The market is affected by soyabean oil's fall but there is also a general agreement that exports have not picked up in July despite all the talk on the festive season pushing up demand, said one trader.
Traders said exports for the first 20 days in July are likely to be 4 to 6 percent lower at 645,000 tons, compared with the same period a month ago.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance will release export data for July 1-20 on Friday.
Industry officials earlier said palm oil demand will pick up from July as buyers lock in supplies for a series of festivals such as the Chinese Mid-Autumn festival and the Muslim holy month of Ramazan, both due in September.
But traders now say high prices could push consumers to delay purchases until the end of July. Palm oil is 10 per cent off a historic high of 2,764 ringgit reached in early June.
Other traded months fell between 5 and 78 ringgit in overall trade of 10,542 lots of 25 tonnes each.
Soybean futures on the Chicago Board of Trade slid on Thursday, pressured by wet weather in the U.S. Midwest, but volatile weather forecasts have made it difficult to trade in the market.
August soyoil in electronic trade during Asian hours was down 0.29 cent to 37.21 cents per lb by 1044 GMT.
Malaysian palm oil usually takes its cue from the US soyaoil market because both commodities are used in products ranging from cookies and cosmetics to biodiesel.
October palm oil on Singapore's Joint Asian Derivatives Exchange was untraded while the November contract fell $4.25 at $725.50 a tonne with just two lots being traded by 1044 GMT.
In the physical market, crude palm oil for July shipment in Malaysia's southern region were quoted at 2,615/2,620 ringgit a ton. Trades were done between 2,625 and 2,650 ringgit.—Reuters