The Edge Markets (12/06/2018) - JAKARTA (June 12): Malaysian palm oil futures dropped more than 1% to their lowest in nearly two years on Tuesday, weighed down by the government's decision to maintain an export tax for July and due to lacklustre demand.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 1.44% to 2,326 ringgit (US$583.25 per tonne by the close of trade, the lowest since August, 2016.
Prices dropped as low as 2,323 ringgit during the day and trading volumes stood at 59,383 lots of 25 tonnes each.
Malaysia, the world's second-largest palm oil producer, kept its crude palm oil export tax at 5% in July. The tax was resumed in May, after a four-month hiatus to increase demand and boost prices.
"Going forward the market is very concerned about demand, because it's not picking up as it should. Production is also supposed pick up and that will put further pressure on inventories and prices," said David Ng of Phillip Futures.
Malaysia's exports of palm oil, an ingredient used in goods ranging from soap to chocolate, between June 1 and June 10 stood at 324,947 tonnes, down 20% from the same period a month earlier.
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.
On the Dalian Commodity Exchange, the September soybean oil contract dropped 0.66%, while the July soybean oil contract on the Chicago Board of Trade was also down 0.23%.
Palm, soy, and crude oil prices as of 1047 GMT
Contract Month Last Change Low High Volume
MY PALM OIL JUN8 2316 -43.00 2316 2335 22
MY PALM OIL JUL8 2329 -33.00 2324 2365 3584
MY PALM OIL AUG8 2326 -34.00 2323 2366 14029
CHINA PALM OLEIN SEP8 4924 -54.00 4918 4988 275576
CHINA SOYOIL SEP8 5700 -38.00 5692 5768 451228
CBOT SOY OIL JUL8 30.50 -4.70 30.39 30.73 8615
INDIA PALM OIL JUN8 637.00 -4.70 636.80 642.50 1135
INDIA SOYOIL JUN8 734.70 -5.60 734.70 739.50 5600
NYMEX CRUDE JUL8 66.12 +0.02 66.00 66.59 106097
* Palm oil prices in Malaysian ringgit per tonne
* CBOT soy oil in U.S. cents per pound
* Dalian soy oil and RBD palm olein in Chinese yuan per tonne
* India soy oil in Indian rupee per 10 kg
* Crude in U.S. dollars per barrel
(US$1 = 3.9880 ringgit)
Read more at http://www.theedgemarkets.com/article/malaysian-palm-oil-slides-near-twoyear-low