12.03.2018 (Business Recorder) - KUALA LUMPUR: Malaysian palm oil futures closed slightly higher on Monday after falling by as much as 1 percent on the back of bearish government data released by the Malaysian Palm Oil Board (MPOB) at the midday break.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,381 ringgit ($610.04) a tonne at the close, rising from its lowest in over a year-and-a-half reached in its previous trading session and snapping three days of losses.
Palm earlier fell to an intraday low of 2,350 ringgit, a fresh low in over 18 months.
Trading volumes stood at 44,320 lots of 25 tonnes each at the end of the trading day.
“The market is down on the MPOB data, palm will be weak as the external fundamentals are not good for palm,” said a Kuala Lumpur-based futures trader, referring to industry regulator data.
Another trader said earlier he expected March production to rise month-on-month, contributing to bearish sentiment in the market.
Palm oil inventories in Malaysia edged down nearly 3 percent to a four-month low at end-February to 2.48 million tonnes, but was still higher than a Reuters forecast of 2.37 million tonnes.
Production fell 15.4 percent to 1.34 million tonnes, a fourth consecutive month of decline to its lowest in a year, but its highest February levels since at least 2000.
February exports declined 13.3 percent to 1.31 million tonnes, its sharpest monthly decline in a year, and could further drop in March after India raised its import taxes on palm oil to the highest in over a decade.
Indian importers last week sought to cancel up to 100,000 tonnes of crude palm oil cargoes as costs have risen on import duties.
Malaysian palm oil shipments fell in March 1-10, down 12.1 percent from the corresponding period last month, according to inspection company AmSpec Agri Malaysia on Monday.
In other related oils, the Chicago Board of Trade’s May soybean oil contract was down 0.2 percent, while the May soybean oil on China’s Dalian Commodity Exchange fell 0.6 percent. The Dalian May palm oil contract declined 0.6 percent.
Palm oil prices are affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Palm oil has found a support at 2,367 ringgit per tonne and it may hover above this level or bounce into a range of 2,403-2,420 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.