Malaysian palm futures declined in late trade on Tuesday, tracking a fall in prices of rival oils on China's Dalian Commodity Exchange and weakness on the Chicago Board of Trade. The fall was more of a correction after six consecutive sessions of gains, traders said. Benchmark palm oil futures for February delivery on the Bursa Malaysia Derivatives Exchange lost 0.9 percent to 3,050 ringgit ($683) a tonne at the midday break, its sharpest daily fall since November 15.
Traded volumes stood at 29,709 lots of 25 tonnes each, below the 2015 daily average of 44,600 lots. "Dalian came off, and palm olein is weak," said a futures trader from Kuala Lumpur, referring to related oils trading on China's Dalian Commodity Exchange. Movement in related oilseeds such as soya impacts palm prices as they compete for a share in the global vegetable oils market.
Palm had climbed to a four-year top of 3,098 ringgit last Thursday, helped by a weaker ringgit and gains in soyaoil. The rally had gained momentum after leading analysts forecast firmer prices in the short term at an industry conference in Indonesia last week. Palm prices could rise 10 percent from current levels by the first quarter of 2017 before declining as stockpile recovers, leading analyst Dorab Mistry said.
Another analyst, Siegfried Falk, forecast Rotterdam crude palm oil at $770-$800 per tonne from January to March 2017 before dipping to $750-$780 from April to June. In related vegetable oils, the January soyabean oil contract on CBOT fell 0.4 percent, while May soyabean oil on the Dalian Commodity Exchange dropped 0.6 percent. May contract of palm olein on the Dalian Commodity Exchange was down 1.5 percent.
Comments
Comments are closed for this article.