VEGOILS - Palm oil prices fall on the back of weak exports and dissipating concerns about production.

Malaysian palm futures dropped on Monday, ending three sessions of gains. Concerns about Indonesian production eased as weak export data and concerns over the output were a factor.

The benchmark contract for palm oil delivery in February on Bursa Derivatives Exchange fell 5 ringgit (0.51%) to 4,093 Ringgit ($991.76) per metric ton. A Kuala Lumpur trader reported that the contract had pared its earlier gains, after Indonesia's largest association for palm oil GAPKI stated it did not see any major impact on palm oil production yet due to the devastating floods in Sumatra. A rare tropical storm that formed in the Malacca Strait last week caused heavy rains and winds to devastate Indonesia, Malaysia, and Thailand. On Sunday, rescue and relief officials were still trying access many flood-hit regions in Southeast Asian countries. This was despite the fact that flood waters had receded. Tens of thousands of residents were evacuated from all three countries. Intertek Testing Services, a cargo surveyor, said that exports of Malaysian products containing palm oil for November were down 19.7% compared to the previous month. This also impacted prices. Indonesian statistics bureau reported that the country exported 19,49 million metric tonnes of crude palm oil and refined palm oils from January to October, an increase of 7.83% in volume compared with the same period the previous year.

The contract rose 1.1% last weekend, but fell 2.78% in the month of November, marking its third consecutive monthly decline.

Dalian's palm oil contract, which is the most active contract, increased by 0.75%. Chicago Board of Trade soyoil fell by 0.31%.

Palm oil follows the price movement of other edible oils as it competes to gain a share in the global vegetable oils markets. A Trade Ministry regulation shows that Indonesia's crude palm oil price reference for December is $926.14 a ton. This is down from the $963.75 a ton in November.

Technical analyst Wang Tao stated that palm oil could retrace back to 4,084 Ringgit per metric tonne, due to resistance at 4,157 Ringgit.

(source: Reuters)