KUALA LUMPUR (Aug 15): Malaysian palm oil futures fell on Wednesday to their lowest in nearly two weeks in the second half of trade, tracking losses in U.S. soyoil and on weak export demand.
Also, weighing on sentiment was weakness in the Indian rupee, which has made imports expensive for local buyers in the South Asian nation.
This will hurt palm oil export demand in Malaysia as India is the world's biggest importer of edible oils.
The rupee fell to a record low of more than 70 per dollar on Tuesday, amid concerns about Turkey's economic woes spreading to other emerging markets such as India.
Indian markets were closed on Wednesday for a holiday.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 0.8% at 2,195 ringgit (US$535.10) a tonne at the close of trade. Palm earlier fell to an intraday low of 2,192 ringgit, its weakest since Aug 3.
Trading volumes stood at 47,322 lots of 25 tonnes each.
"There is also very low demand for the month of August which I expect to go lower," said a Kuala Lumpur-based trader.
Malaysia's palm oil shipments in the first half of August also slid, with inspection company AmSpec Agri Malaysia reporting a 14.6% decline in exports from a month earlier.
Cargo surveyor Societe Generale de Surveillance reported a 11.1% decline in Malaysian exports for the same period.
Traders said they expected buyers to hold off imports from Malaysia in August, as the Southeast Asian nation has reduced its export tax on crude palm oil for September to zero from 4.5% this month.
Palm oil is biased to fall into a range of 2,165-2,179 ringgit per tonne, as it has completed a bounce, or the first round of a bounce from 2,140 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.
In other related oils, the Chicago December soybean oil contract was down 0.8%, while the January soybean oil contract on China's Dalian Commodity Exchange gained 0.4%.
Meanwhile, the Dalian January palm oil contract slipped 0.2%.
Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.
Palm, soy and crude oil prices at 1107 GMT
|MY PALM OIL||AUG8||0||+0.00||0||0||0|
|MY PALM OIL||SEP8||2180||-17.00||2180||2202||821|
|MY PALM OIL||OCT8||2193||-18.00||2192||2217||15084|
|CHINA PALM OLEIN||JAN9||4900||-12.00||4888||4932||212646|
|CBOT SOY OIL||DEC8||28.38||-0.25||28.36||28.64||4524|
|INDIA PALM OIL||AUG8||595.70||-0.20||592.20||596.7||725|
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 = 4.1020 ringgit)
(US$1 = 69.9150 Indian rupees)
(US$1 = 6.9104 Chinese yuan)