The Edge Markets (12/06/2018) - JAKARTA (June 12): Malaysian palm oil futures dropped more than 1% to their lowest in nearly two years on Tuesday, weighed down by the government's decision to maintain an export tax for July and due to lacklustre demand.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 1.44% to 2,326 ringgit (US$583.25 per tonne by the close of trade, the lowest since August, 2016.

Prices dropped as low as 2,323 ringgit during the day and trading volumes stood at 59,383 lots of 25 tonnes each.

Malaysia, the world's second-largest palm oil producer, kept its crude palm oil export tax at 5% in July. The tax was resumed in May, after a four-month hiatus to increase demand and boost prices.

"Going forward the market is very concerned about demand, because it's not picking up as it should. Production is also supposed pick up and that will put further pressure on inventories and prices," said David Ng of Phillip Futures.

Malaysia's exports of palm oil, an ingredient used in goods ranging from soap to chocolate, between June 1 and June 10 stood at 324,947 tonnes, down 20% from the same period a month earlier.

Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.

On the Dalian Commodity Exchange, the September soybean oil contract dropped 0.66%, while the July soybean oil contract on the Chicago Board of Trade was also down 0.23%.

Palm, soy, and crude oil prices as of 1047 GMT

Contract                            Month   Last   Change   Low   High Volume

MY PALM OIL                     JUN8   2316    -43.00    2316    2335     22

MY PALM OIL                     JUL8   2329    -33.00     2324   2365  3584

MY PALM OIL                     AUG8 2326    -34.00     2323    2366   14029

CHINA PALM OLEIN         SEP8   4924    -54.00     4918    4988   275576

CHINA SOYOIL                   SEP8   5700    -38.00     5692   5768   451228

CBOT SOY OIL                    JUL8   30.50   -4.70      30.39   30.73   8615

INDIA PALM OIL                JUN8   637.00 -4.70     636.80  642.50  1135

INDIA SOYOIL                    JUN8   734.70  -5.60    734.70  739.50   5600

NYMEX CRUDE                  JUL8   66.12   +0.02     66.00   66.59   106097

* Palm oil prices in Malaysian ringgit per tonne

* CBOT soy oil in U.S. cents per pound

* Dalian soy oil and RBD palm olein in Chinese yuan per tonne

* India soy oil in Indian rupee per 10 kg

* Crude in U.S. dollars per barrel

(US$1 = 3.9880 ringgit)

Read more at http://www.theedgemarkets.com/article/malaysian-palm-oil-slides-near-twoyear-low