Palm oil exports from Malaysia in May were 15.65% lower month on month to 1.29 million mt, data from the Malaysian Palm Oil Board showed Monday.
CPO front-month futures on Bursa Malaysia fell to MR2,349/mt ($588.94/mt), down MR20/mt.
The market expectation was for a fall of 9-12%, Sathia Varqa of Palm Oil Analytics said.
Exports to major destination markets like India were soft in May, despite demand ahead of the Ramadan and Eid holidays in the region. That was largely due to the Indian import duty structure, which was currently more favorable towards soybean oil and sunflower oil, source said.
An Indian agriculture ministry official said last week the government would raise import duties on sunflower oil and soybean oil as well, though an official announcement to that effect has not been made.
Meanwhile, PME exports from Malaysia rose 27.7% month on month in May to 36,822 mt, as some cargoes were shipped to Europe, while a new Chinese arbitrage for non-RED PME opened during late May.
At least, 15,000 mt of non-RED PME was shipped from Malaysia to China late May, a shipping source said.
CPO production during May was down 2.1% to 1.53 million mt, MPOB data showed. That was despite palm trees approaching a peak production period, but at the same time as the lower productivity seen during Ramadan.
Palm inventories in May continue to be high, said Oscar Tjakra, Director Food and Agribusiness at Rabobank Singapore, and were projected to remain high, keeping the market weak.
Palm oil inventories fell 0.5% month on month in May to 2.17 million mt, MPOB data showed.
