Malaysian palm oil futures slid to their lowest in over a year in late trade on Thursday, charting a sixth day of losses in eight, as traders turned bearish over weakening export demand.
The market had been range-bound before edging higher at the midday break on Thursday, supported by overnight gains in related edible oils and a weaker ringgit, which usually makes palm cheaper for holders of foreign currencies.
But then the benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 1.3 percent to 2,332 ringgit ($593.23) a tonne at the end of the trading day, its sharpest daily decline in over three weeks.
Palm had earlier fallen to an intraday low of 2,329 ringgit, its lowest level since August 2, 2016. It is down 2.1 percent for the week, in line for a second weekly decline.
Trading volumes stood at 53,213 lots of 25 tonnes each at the midday break.
“It looks like there is a demand problem, May exports will not be good,” said a Kuala Lumpur based futures trader, referring to Malaysia’s resumption of crude palm oil export taxes after a four-month suspension.
Malaysia had announced in mid-April that it would introduce a 5 percent crude palm oil export tax for May. This followed a decision to extend tax exemptions on crude palm oil exports for a fourth month in April, a move aimed at cutting inventories and supporting prices.
Palm oil exports from Malaysia, the world’s second largest producer, had already dropped 4.5-5.7 percent for the full month of April compared with March, reported cargo surveyor Societe Generale de Surveillance and inspection company AmSpec Agri Malaysia earlier this week.
In other related oils, the Chicago July soybean oil contract was slightly up 0.03 percent, while the September soybean oil on China’s Dalian Commodity Exchange rose 0.6 percent.
The Dalian September palm oil contract was flat at around 1130 GMT.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Palm oil may fall more into a range of 2,315-2,338 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals.