CPO Traded Under Pressure For The Second Consecutive Session

MCX CPO traded under pressure for the second consecutive session on Monday tracking weak price trend in Malaysian exchange and cut in tariff values of all the edible oils. The base import price of crude palm oil and RBD palmolein was cut by $14 each and $17 to $644 per tn and $673 per tn, respectively. According to SEA monthly update, plam oil imports into the country were down 33% and 46% for CPO and RBD Palomlein in May compared to last year. India’s palm oil imports dropped in May due to higher taxes on shipments while weaker rupees making imports expensive.

Malaysian palm oil futures saw their sharpest decline in a week on Monday due to weaker export demand, expectation of improvement in production in coming months and a fall in crude oil prices. Malaysia's exports between June 1 and 15 stood at 500,197 tonnes, down 7 % from the same period a month earlier. It is trading 10-15% lower than the last year expectation of lower export demands due to continuation of export tax for July also weighs on prices. Malaysia, the world's second-largest palm oil producer, kept its crude palm oil export tax at 5% in July. As per latest MPOB data release, Malaysia's palm oil exports fell 15.7% on month to 1.29 mt in May due to lower demand from China and the EU resulted in a fall in exports. Malaysia's crude palm oil production also declined 2.11% on month to 1.53 mt in May. Crude palm oil inventories were at 1.17 mt in the country at the end of May, down 2.08% from a month ago.

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