Palm oil drops to 4-1/2 month low on demand worries

KUALA LUMPUR, May 26 (Reuters) - Malaysian palm oil futures slid to their lowest in four-and-a-half months on Monday as the ringgit continued to advance and amid worries that festival-driven demand will fizzle out faster than expected.

The benchmark August contract on the Bursa Malaysia Derivatives Exchange touched 2,490 ringgit in early trade, its lowest since Jan. 15, before settling at 2,496 ringgit ($779)  per tonne by the midday break, down 0.8 per cent.

Total traded volume stood at 20,607 lots of 25 tonnes, well above the average 12,500 lots.

"The Ramadan demand has quickly faded. Exports are moving down compared to the first 15 days," said a trader with a local commodities brokerage.     

Shipments of Malaysian palm oil products during May 1-25 rose 14 per cent from a month ago to 1.09 million tonnes, cargo surveyor Intertek Testing Services showed, slowing down from a 23 per cent jump recorded in the first half of May.

The Muslim festival of Ramadan and Eid al-Fitr, celebrated with communal fasting and feasting from end-June onwards, typically drives up consumption of edible oils especially in India, Pakistan, and the Middle East.