Crude palm-oil futures on Malaysia’s derivatives exchange ended lower Tuesday
tracking weaker CBOT soyoil futures.
However, easing palm-oil stocks helped to limit losses.
The benchmark May contract at Bursa Malaysia Derivatives ended 39 ringgit
lower at MYR2,411 a metric ton after moving in a MYR2,413-MYR2,442 range.
CBOT May soyoil is down 0.9% at 50.01 U.S. cents a pound in screen trade
after data from the U.S. Department of Agriculture showed reduced demand for
soybeans. Soybeans are usually crushed and processed into soymeal and soyoil–a
direct substitute for palm oil.
"Palm oil is down but easing stockpiles in the coming months will help to
underpin prices," a trading executive at a foreign commodities brokerage.
CPO production is "expected to continue to decline as we come off the peak
season," RHB Investment Bank analyst Hoe Lee Leng said in a report. Palm-oil
production in Southeast Asia usually dips in November to March before rising
from July.
Inventory levels at the world's No. 2 producer will ease to 2.23 million tons
by June on the back of recovering export demand as winter season in the Northern
Hemisphere ends, Ms. Hoe said.
The oil tends to solidify and turn cloudy in cold weather reducing its appeal
as a cooking oil.
Vessels and loading at main ports in Malaysia is modest, a Penang-based
shipping executive said indicating steady exports this month.
Over Malaysian Borneo some palm-oil exporters have diverted their cargo
loading activities to Lahad Datu port following armed clashes with Filipino
rebels in Sabah state leading to a larger vessel line up at the port.
Sabah is Malaysia's biggest oil-palm growing region. The state's crude palm
oil production last year accounted for 30% of the country's total production,
according to industry regulator the Malaysian Palm Oil Board.
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