KUALA LUMPUR (Reuters) - Palm oil futures reversed early gains on Thursday to close at their lowest in seven weeks, as concerns over weaker June partial exports outweighed smaller-than-expected inventories at the end of May.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange closed down RM26, or 0.67%, at RM3,845 a tonne, after rising as much as 2% during the day.
It was fourth straight day of losses and its lowest closing since April 20.
Malaysia's exports during June 1-10 declined 14.3% to 402,520 tonnes from the same period in May, said cargo surveyor Amspec Agri.
Palm oil stocks at the end of May rose more slowly than expected, up 1.49% from the previous month to 1.57 million tonnes, according to Malaysian Palm Oil Board (MPOB) data.
May production and exports were also below market estimates. Production ticked up 2.84% from April to 1.57 million tonnes, while palm oil exports fell 6.01% to 1.27 million tonnes, according to MPOB.
MPOB data is supportive and the market will now shift its focus to June's export performance and production outlook, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The Indonesian palm oil association (GAPKI) is urging palm oil plantations to tighten COVID-19 protocols in the country's top-producing province of Riau after a surge in infections in the area, an official at the industry body said.
Dalian's most-active soyoil contract gained 0.2%, while its palm oil contract fell 1.8%. Soyoil prices on the Chicago Board of Trade were up 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.