CPO Falls More Than 1% On Wednesday

CPO falls more than 1% on Wednesday tracking weak trend in palm oil in Malaysia and expectation of improved demand for edible oil in the country. However, prices have been in a range due to weaker rupees and steady domestic demand. The government has slashed the base import price of CPO and RBD Palmolein by $26to $618 per ton and $27 to $646 per ton respectively.

According to SEA monthly update, palm oil imports into the country were down 33% and 46% for CPO and RBD Palmolein 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. Palm oil accounts for the bulk of the total edible oil imported annually, with most of the commodity imported from Indonesia and Malaysia.

Malaysian palm oil futures fell over 2% tracking weakness in related oils on China's Dalian Commodity Exchange and higher stocks. CPO slipped to two years low due to escalating U.S.-China trade conflict. The Malaysian Palm Oil Board (MPOB) data also showed end-stocks in June rose 0.8% from the previous month to 2.19 mt, while exports declined 12.6% to 1.13 mt. Malaysian palm oil shipments during July 1-10 also fell 14.4% from the corresponding period last month. However, the prices are still under pressure due to higher palm oil stocks and reports of improved production in coming months. June production fell 12.6% to 1.33 mt versus the previous month, according to data from industry regulator the MPOB on Tuesday. Output is expected to rise in July and throughout the third quarter of the year, in line with seasonal trends.

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