(May 3): Malaysian palm oil futures fell to a near two-month low on Tuesday, as poor demand for palm oil shipments weighed down the market.
The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 2.1% to 2,539 ringgit (US$647) per tonne at the close of trade, marking the fourth consecutive session of declines. It hit an intraday low of 2,537 ringgit per tonne, the lowest since March 9.
Traded volumes were 51,744 lots of 25 tonnes each, higher than a 2015 daily average of 44,600.
Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Tuesday that palm oil shipments for the full month of April declined between 5% and 7% from March, as exports to major buyers Europe, China and India all fell.
"Exports are still not good, and production is still doing alright, we believe it (April production) is close to double digit growth," said a palm oil trader based in Kuala Lumpur.
"May exports could be better as (benchmark) prices drop or hover around current levels this month."
April production in Malaysia, the world's second-largest palm grower, is seen rising in line with the seasonal trend from the 1.2 million tonnes produced in March.
This would contribute to higher inventory levels, likely pushing down benchmark prices of the tropical oil.
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