Palm oil futures for August delivery on the Bursa Malaysia Derivatives Exchange dropped 1.9 percent to 2,481 ringgit ($605) per tonne at the close of trade on Tuesday.
KUALA LUMPUR: Malaysian palm oil futures took a slight dip in evening trade on Monday after eeing gains in the morning, as traders sold on poorer performing exports and a volatile ringgit.
The ringgit, which tumbled in recent sessions on concerns over Britain's vote to exit the European Union, fell 0.2 percent to reach 4.1000 against the dollar in the evening. A falling ringgit, palm's currency of trade which dropped 1.9 percent on Friday, usually makes the vegetable oil cheaper for holders of foreign currencies.
A trader from Kuala Lumpur however said the ringgit's instability, coupled with slowing exports, has caused buyers to put purchases on hold.
"The months ahead are going to be difficult for exports. Volatility in the ringgit is soaring, keeping consumers at the sidelines," he said."
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange fell 0.04 percent to 2,378 ringgit ($580) per tonne at the close of trade. Traded
volumes stood at 44,954 lots of 25 tonnes each on Monday evening.
Palm has declined 9.2 percent so far this month, it's sharpest monthly fall since August 2014. Palm had earlier declined for three consecutive weeks as traders forecast rising output and slowing exports.
Production rose nearly 5 percent month-on-month in May, and is set to gain in line with the seasonal growing trend from now until the last quarter of the year.
Malaysian palm oil shipments however have declined in June as demand slows with the end of the Ramadan holiday coming soon.
Exports from June 1-25 fell 9-10 percent from the corresponding time period last month, ccording to cargo surveyor data on Monday.
Palm oil exports usually taper off after the end of Ramadan until renewed demand starts for the Hindu festival of Diwali in October.
In competing vegetable oils, the Chicago Board of Trade soyoil contract for December rose 0.6 percent, while the September soybean oil contract on the Dalian Commodity Exchange gained 0.9 percent.- Reuters
Limited time offer:
Just RM5 per month.
