KUALA LUMPUR, May 15: Malaysian crude palm oil futures fell 1 per cent on Thursday after disappointing export data from cargo surveyors and weakness in global vegoil markets.

Palm oil futures are expected to ease further from Monday’s three-week high if export demand fails to gain more momentum, traders said.

The benchmark July contract on the Bursa Malaysia Derivatives Exchange settled down 37 ringgit at 3,521 ringgit ($1,075), after earlier dropping as low as 3,498 ringgit.

Exports are still disappointing but some players are still holding out for a strong recovery in exports by the end of the month, said a trader with a local commodities broker. If it does not happen, the market is in for a big correction. Traders expected exports of palm oil products for May 1-15 to hit the level of 700,000 tons on strong demand from India, China and Pakistan but cargo surveyor Intertek Testing Services only reported an increase of 10.9 per cent to 642,538 tons.

Other traded months fell between 21 and 46 ringgit, except for spot month which edged higher. Overall trade fell to 6,842 lots of 25 tons each from the usual 10,000 lots.

The Argentine soy market was at a standstill with no grain being traded due to a farmers’ strike. Oil rose towards $125 a barrel on Thursday as the dollar weakened, recovering after the previous session when rising US fuel inventories sent the market lower.

Malaysia’s crude palm oil stocks fell 1.97 per cent to 1,789,383 tons in April, from a revised 1,825,386 tons in March, official crop agency Malaysian Palm Oil Board said on Monday.

Malaysia, the world’s second-largest palm oil producer, is unlikely to replace plantations with rice farms since edible oil is more profitable to produce, Agriculture Minister Mustapa Mohamed said on Thursday.

Looking at the economics of it, it does not appear to be viable, the minister said, adding that aerial views of eastern state of Sabah revealed areas completely swathed in oil palm.

In Malaysia’s physical market, crude palm oil for May shipment in the southern region was quoted at 3,510/3,550 ringgit. Trades were not quoted by the end of the session.—Reuters