Palm exports slump to a two-week low due to weak demand

The market for Malaysian palm oil futures reverted to its previous gains on Tuesday as export demand continued to be a drag. The benchmark palm oil contract for August delivery at the Bursa Derivatives exchange was down 48 Ringgit or 1.05% to 4,527 Ringgit ($1,115.57), the lowest price since May 26. Paramalingam Supramaniam is a director at brokerage Pelindung Bestari. He said that the market was still on edge due to a combination of weak demand and subtle signs of recovery in June production. He added that a weaker ringgit could provide some relief but not on a long-term basis, as the market must see genuine demand before it enters the peak production months of the third quarter. The palm ringgit's trade currency strengthened by?0.29% on Tuesday after falling to its lowest levels since January 13.

Cargo surveyors estimate that the exports of Malaysian products containing palm oil for May decreased between 8.8% to 15.5% compared to a month ago. Malaysian Palm Oil Board will release its monthly data on supply and demand Wednesday. Dalian's palm oil contract dropped 1.3%, while the most active soyoil contract declined 0.85%. Soyoil prices at the Chicago Board of Trade fell by 0.27%.

Palm 'oil follows?the movements of edible oils as it competes to gain a share in the global vegetable oil market. After Iran and Israel announced that they had stopped attacking each other in response to a request from U.S. president Donald Trump, oil prices fell as well, wiping out most of the previous session's gains. Both sides, however, warned that hostilities could be resumed.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

(source: Reuters)