Mumbai, 16 April (Commoditiescontrol)
Malaysian palm oil futures continued their bearish trend for a third straight session on Tuesday, hitting its lowest in five weeks amid anticipation of improving production and softer demand.
The most active contract of palm oil for July delivery on the Bursa Malaysia Derivatives (BMD) Exchange fell 30 ringgit or 0.72% to 4,111 ringgit ($857.71) a ton, its lowest since March 11.
Malaysia's palm oil inventories at end-March fell 10.68% from the previous month to 1.71 million metric tons, the lowest in 10 months, as a surge in exports overshadowed output, according to Malaysian Palm Oil Board data on Monday.
Production gained 10.57% to 1.39 million tons for the period, according to the data. Exports jumped 28.61% to 1.32 million tons.
Output in the world's second-largest producer is expected to improve in the second quarter due to favourable weather patterns and improved productivity of newly hired foreign labour, MIDF Research said in a note.
But analysts said the strong exports seen in March are unlikely to sustain in the coming months due to more attractive prices of competing edible oils and as festive demand abates, as per the analysts.
Exports during April 1-15 rose 9.2% to 633,680 metric tons, from March 1-15, cargo surveyor Intertek Testing Services said. Another surveyor, Amspec Agri Malaysia, said exports rose 28.5% to 697,449 tons.
Dalian's most-active soyoil contract fell 1.77%, while its palm oil contract dropped 2.3%. Soyoil prices on the Chicago Board of Trade were down 0.5%.
"Ongoing South American soybean harvest is likely to set the tone for second edible oil prices," Kenanga Research said in a note.
Palm oil normally takes directions from the price movements in related oils as they compete for a share in the global vegetable oils market.
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