Malaysian palm oil futures reversed early gains to trade lower on Tuesday, weighed down by a drop in exports of Malaysian palm oil products in May.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange was down 30 ringgit or 0.77%, at 3,849 ringgit ($822.26) a metric ton by midday.
Weaker Malaysian palm oil export performance in May dragged down prices, but expectations of a sharp rise in production have capped gains, said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.
According to cargo surveyor Intertek Testing Services, exports of Malaysian palm oil products for May 1-15 fell 5.2% to 600,777 metric tons from 633,680 metric tons shipped during the same period in April.
Cargo surveyor Societe Generale de Surveillance (SGS) estimates exports of Malaysian palm oil products for May 1-15 at 426,947 metric tons, according to LSEG.
Malaysia has maintained its June export tax for crude palm oil at 8% and lowered its reference price to 3,956.06 ringgit ($845.13) per metric ton for June, compared with May’s 4,273.93 ringgit a ton.
Soy oil prices on the Chicago Board of Trade BOc2 fell 1.3%.
Soybean harvesting in flood-hit Rio Grande do Sul state reached 85% of the area, up from 78% last week, according to crop agency Emater.
Palm oil FCPOc3 may rise into a range of 4,002-4,025 ringgit per metric ton.
Oil prices extended losses in Asia trade on Tuesday, with investors anticipating lingering U.S. inflation and higher interest rates to depress consumer and industrial demand. O/R
weaker crude oil futures typically make palm a less attractive option for biodiesel feedstock.
Source: Hellenic Shipping News
