KUALA LUMPUR, April 22: Malaysian crude palm oil futures fell on Tuesday as fears of a slowdown in export momentum offset the strength in vegetable oil prices in Asian trade.
But uncertainity over the trend of palm oil exports have kept trade volatile and prices weak, traders said. Palm oil prices have gained nearly 13 per cent this year but tumbled roughly 23 per cent from a record 4,486 ringgit last month.
The benchmark July contract on Bursa Malaysia Derivatives Exchange settled down 19 ringgit to 3,440 ringgit ($1,097) per ton after going as low as 3,385 ringgit, a level not seen since April 10.
Other traded months ranged between between an 18 ringgit decline to gains of 62 ringgit. Overall trade stood at 9,222 lots of 25 tons each.
Palm oil prices are still relatively high and the appreciation of the ringgit makes it worse and forces price-sensitive countries in Asia to hold back purchases, said a dealer with a local trading firm.
Exports of Malaysian palm oil products for April 1-20 fell 5.3 per cent to 782,609 tons, cargo surveyor Intertek Testing Services said on Monday, while Societe Generale de Surveillance reported increases of 4.6 per cent to 862,636 tons.
The decline was far less pronounced than falls of up to 41 per cent between April 1 and 10, which prompted some traders to suggest a full recovery in demand was round the corner.
China and India need to buy now because the prices are so ideal and April is the start of the buying season, said a Singaporean trader, adding that exports could reach 1.25 million tons this month.
He said: Even if there is a slowdown in purchases, the normal quantities bought are getting bigger because of the growing population.
China’s soybean traders expect the market to turn bullish as crushers start active purchases this week, spurred by fears that prices will rise further, according to a survey by an official think tank on last week.
In Malaysia’s physical market, crude palm oil for April shipment in the southern region was quoted at 3,450/3,470 ringgit a ton. Trades were unquoted by the end of the session.—Reuters