Palm oil futures on the Bursa Malaysia Derivatives exchange are seen headed lower on Tuesday on weaker export trends and tension with major trade partner China.
Bursa Malaysia front-month palm oil futures for November fell 2,199 ringgit (US$535.69) a metric ton, its weakest since Aug. 15. Trading volumes were 24,463 lots of 25 metric tons.
Exports of Malaysian palm oil products for Aug. 1-25 fell 13.6 percent to 786,947 metric tons from 910,774 metric tons shipped July 1-25, cargo surveyor Societe Generale de Surveillance said on Monday.
At the weekend, reports showed exports of Malaysian palm oil products for Aug. 1-25 fell 9.4 percent to 835,134 metric tons from 921,821 metric tons shipped during July 1-25, cargo surveyor Intertek Testing Services said, while AmSpec Agri Malaysia said palm oil products for Aug. 1-25 fell 9 percent to 821,485 metric tons from 902,979 metric tons shipped between July 1-25.
Palm oil exports are also being eyed on trade tensions with China after Malaysian Prime Minister Mahathir Mohamad on Monday declared that foreigners will not be granted visas to live in the giant Forest City real estate project on the country’s southern tip, affecting many of the 700,000 people expected to eventually live there.
“One thing is certain, that city that is going to be built cannot be sold to foreigners,” Mahathir said at a news conference on Monday in Kuala Lumpur. “We are not going to give visas for people to come and live here.”
However, the statement appears to conflict with Mahathir’s earlier position on foreign investment. Developer Country Garden Pacificview said in a release it has reached out to Mahathir’s office for clarification on the statement, and claims the prime minister’s comments “may have been taken out of context in certain media reports,” writes Reuters. In a 16 August meeting, Mahathir had with the developer he “reiterated that he welcomes foreign investments which could create employment opportunities, promote technology transfer and innovations that could benefit Malaysia’s economic growth and job creation,” Country Garden Pacificview said, according to Reuters.