KUALA LUMPUR - Malaysian palm oil futures fell nearly 4 percent on Thursday evening to their lowest in almost five months, weighed down by weakness in U.S. soyoil prices on the Chicago Board of Trade and weak demand sentiment.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 3 percent at 2,032 ringgit ($491.36) a tonne at the close of a fifth consecutive session of declines. The fall was also the sharpest daily decline since mid-December.
Palm had earlier fallen as much as 3.8 percent to 2,016 ringgit, its weakest since Dec. 11.
"After the duty announcement, destination markets will take their time to buy," one Kuala Lumpur-based trader said. "Prices of contracts for nearby months have also come down, so forward prices now have to adjust, too."
Malaysia announced this week that it would defer the imposition of an export duty on crude palm oil to Dec. 31 in an effort to boost palm oil exports and expand in new markets.
Traders, however, say this might not boost demand, given that the duty has been at zero percent since September.
Palm prices have been rangebound over the past two months because of high end-stocks and flat demand.
Stockpiles in Malaysia had climbed to their highest in at least 19 years in December before easing 4.6 percent in March, data from the Malaysian Palm Oil Board (MPOB) showed.
Meanwhile, shipments in April rose 0.5-2 percent month on month, according to cargo surveyors Societe Generale de Surveillance and Amspec Agri Malaysia.
Another cargo surveyor, Intertek Testing Services, reported exports in April remained unchanged from a month earlier.
In related oils, the Chicago May soybean oil contract fell 0.7 percent on Wednesday and was down a further 0.5 percent on Thursday.
U.S. soybean futures hit fresh contract lows on Wednesday, pressured by sluggish exports and worries that rain-delayed U.S. corn seeding would expand the number of acres planted with soybeans, which can be sown later in the spring.
($1 = 4.1355 ringgit)
($1 = 69.3900 Indian rupees)
($1 = 6.7337 Chinese yuan)