KUALA LUMPUR: Malaysian palm oil futures fell on Monday after hitting their highest in 18 months in the last session, as weaker export demand and concerns over the year-end monsoon season dampened market sentiment.
The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange lost 0.2 percent to 2,482 ringgit ($577.75) a tonne at the end of the morning session. The contract hit a high of 2,490 ringgit in the previous trading session on Wednesday, its highest since June 26, 2014.
“Exports are slightly down, and we’re seeing some rains in the south,” said a trader based in Kuala Lumpur, referring to the southern region of Peninsular Malaysia. “The market may also be on a bit of profit taking.” Traded volume stood at 6,753 lots of 25 tonnes each at the midday break.
Palm oil export data from cargo surveyor Intertek Testing Services showed on Saturday a 15.8 percent drop in shipments from Dec. 1-25, compared with the same time period a month ago.
The year end monsoon season in Southeast Asia is also a cause for lower output concerns, as heavy rains and floods make it difficult to gather fresh fruit bunches and disrupt supply chains. In other vegetable oil markets, both the US January soyoil contract and the May soybean oil contract on the Dalian Commodity Exchange lost 0.4 percent.
