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Vegoils: Malaysian palm oil slides to near two-year low

Reuters  |  JAKARTA 

By Kanupriya Kapoor

JAKARTA (Reuters) - Malaysian futures dropped more than 1 percent to their lowest in nearly two years on Tuesday, weighed down by the government's decision to maintain an export tax for July and due to lacklustre demand.

The benchmark contract for August delivery on the Bursa Derivatives Exchange dropped 1.44 percent to 2,326 ringgit ($583.25 per tonne by the close of trade, the lowest since August, 2016.

Prices dropped as low as 2,323 ringgit during the day and trading volumes stood at 59,383 lots of 25 tonnes each.

Malaysia, the world's second-largest producer, kept its at 5 percent in July. The tax was resumed in May, after a four-month hiatus to increase demand and boost prices.

"Going forward the market is very concerned about demand, because it's not picking up as it should. Production is also supposed pick up and that will put further pressure on inventories and prices," said of

Malaysia's exports of palm oil, an ingredient used in goods ranging from soap to chocolate, between June 1 and June 10 stood at 324,947 tonnes, down 20 percent from the same period a month earlier.

Palm track the performances of other edible oils, as they compete for a share in the global vegetable oils market.

On the Dalian Commodity Exchange, the September dropped 0.66 percent, while the July on the was also down 0.23 percent.

(Editing by Sherry Jacob-Phillips/David Evans)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 12 2018. 16:38 IST