Malaysian palm oil futures fall to 6-week low on output concerns

Malaysian palm oil futures dropped over 1 per cent at the close of trade on Tuesday, hitting their lowest levels in nearly six weeks, pressured by weaker soyoil prices and a forecast that February palm output will be higher than usual.
 
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 1.4 per cent at 2,183 ringgit ($536.50) a tonne at the close in a third straight session of falls. It earlier fell to an intraday low of 2,166 ringgit, its lowest since January 17.
 
Trading volumes stood at 52,177 lots of 25 tonnes each at the end of the session.

 

“Production figures were higher, while the market was expecting it to be lower,” said a Kuala Lumpur-based trader, quoting output data from the Malaysian Palm Oil Association that showed a 3.5 per cent monthly rise for the February 1-20 period.
 
Palm oil production typically sees monthly declines in the first quarter of the year, in line with the seasonal trend. Traders, however, see output registering higher levels than last year.
 
Another futures trader said weaker US soyoil on the Chicago Board of Trade also added pressure to palm oil prices.
 
Palm oil prices are affected by movements in soy oil, as they compete for a share in the global vegetable oil market.