KUALA LUMPUR: Malaysian palm oil futures closed slightly lower on Tuesday evening on the back of slow export demand, erasing gains earlier in the day when prices were tracking stronger performing soya.

Palm oil output is also forecast to rise in line with the seasonal growing trend from now until the end of the year, contributing to palm’s bearish outlook.

Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange dropped 0.04 percent to 2,378 ringgit ($584) per tonne in the evening.

Traded volumes stood at 49,328 lots of 25 tonnes each, higher than the 2015 daily average of 44,600 lots.

Palm has declined 9.2 percent so far in June on expectations of rising output amid falling demand, which would be its sharpest monthly fall in nearly two years. A volatile ringgit also contributed to palm’s losses this month.

“The market has mixed reactions at the moment. Industry players say output is going up and exports are going down, resulting in a build-up of stocks in the coming months,” said one trader from Kuala Lumpur.

Another trader said the slow demand weighed on the palm market in the evening, with buyers expecting a reduction in volumes after peak Ramazan demand in May.

Malaysian palm oil shipments fell about 10 percent in June 1-25 compared with May 1-25, cargo surveyor data showed on Monday, as exports weakened with the end of Ramadan approaching. The Chicago Board of Trade soyaoil contract for December rose 1 percent on Tuesday, and the September soyabean oil contract on the Dalian Commodity Exchange increased 1.9 percent.

The offer price for crude palm kernel oil remained at 5,208.40 ringgit per tonne in the evening, according to price assessments by Thomson Reuters.—Reuters