Palm Oil Drops as Intertek Says Exports Fall at Start of June

June 15 (Bloomberg) -- Palm oil futures fell after data showed that exports from Malaysia, the second-largest producer, dropped in the first half of this month as supply picked up.

Shipments from Malaysia dropped 10 percent to 560,416 metric tons in the first 15 days of June compared with the previous month, according to independent surveyor Intertek. The figures were released before the start of the day’s trade.

Last week, the nation’s Palm Oil Board said production had surged 8.5 percent to 1.4 million metric tons in May, lifting stockpiles for the first time in six months by 5.7 percent to 1.37 million tons compared with April.

“Exports are down,” Ong Chee Ting, an analyst at Maybank Investment, said from Kuala Lumpur. If that trend persisted, “prices would be slightly weaker this week,” Ong said.

August-delivery palm oil dropped as much as 1.8 percent to 2,420 ringgit ($687) a ton on the Malaysia Derivatives Exchange, before trading at 2,423 ringgit at 12:08 p.m. The price may fall to less than 2,000 ringgit in the second half, Ong added, when output is seasonally higher than the first six months.

Indonesia and Malaysia are the largest palm oil producers, accounting for about 90 percent of world output. Malaysian data is closely followed for industry trends. Indonesia doesn’t release monthly figures.

Palm oil prices fell for a second week last week after the Malaysian Palm Oil Board released the stockpiles, production and export data on June 10.

Dalian palm oil for September delivery dropped 1.4 percent to 6,472 yuan ($947) a ton at the 11:30 a.m. pause in trading. China is the largest user of palm oil.