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Malaysian palm oil futures fell at the midday break today, as weak export demand and losses in US soyoil weighed.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange was down 0.8% at RM2,266 per tonne, its sharpest intraday loss since June 19.
Palm gained in the previous session, snapping four consecutive days of losses. It is down nearly 7% so far this month.
Trading volumes stood at 19,531 lots of 25 tonnes each at noon.
“The market is lacking demand, this is the primary cause of price declines,” said a Kuala Lumpur based trader.
“Exports have been bad since the export tax was reinstated, and Indonesian prices are more competitive than ours,” added the trader, referring to Malaysia’s tax on crude palm oil exports.
Malaysia resumed export taxes on crude palm oil in May, after suspending it for four months at the start of the year to increase demand and boost prices. It announced a 5% rate for the month of July.
Exports of palm oil and related products from the world’s second largest producer declined 12.5% from June 1-25, reported inspection company AmSpec Agri Malaysia today, versus the corresponding period in May.
Palm’s decline could also be due to weakness in US soyoil on the Chicago Board Of Trade, another trader said. The Chicago July soybean oil contract was last down 0.2% today.
