Palm oil slips from three-week high on output woes
Malaysian palm oil futures eased at the midday break on Tuesday, after hitting a three-week high in early trade, as higher production concerns for the month of May weighed down on prices.
Benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last down 0.6% at 2,086 ringgit ($498.57) per tonne at the midday break.
It earlier rose as much as 0.8% to 2,115 ringgit, its strongest level since April 30.
"Despite data showing export gains, the market is down today due to production which may start picking up a bit. May's full month output (versus April) might be flat," a Kuala Lumpur-based trader said.
Palm oil output in Malaysia, the world's second largest producer, last reported that production fell 1.4% from the previous month to 1.65 million tonnes in April.
Flat or rising stocks from April to May, however, may add on to already high inventory levels, which kept pressure on palm prices since the final quarter of last year.
Meanwhile, Malaysian palm oil shipments during May 1-20 rose between 8.7% and 13% versus the corresponding period last month, showed data from cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia.
In other related oils, the Chicago July soybean oil contract rose 0.4% on Tuesday, while the July soyoil contract on the Dalian Commodity Exchange was down 0.9%.
The Dalian May palm oil contract slightly rose 0.1%.
Palm oil prices are affected by movements in related edible oils, as they compete for a share in the global vegetable oils market.
($1 = 4.1840 ringgit)
($1 = 69.7072 Indian rupees)
($1 = 6.9013 Chinese yuan)
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