Malaysian palm oil futures continued to fall on Thursday evening in its second consecutive session, tracking weakness on China's Dalian Commodity Exchange and on estimates of rising palm oil production. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was down 0.7 percent at 2,723 ringgit ($644.95) a tonne by the end of the session, to its lowest since Oct. 13. Traded volumes stood at 48,701 lots of 25 tonnes each.
Palm prices are impacted by movements of related oils as they compete for a share in the global vegetable oils market. The January soyabean oil contract on the Dalian Commodity Exchange dropped 1.5 percent, while the January palm olein contract declined 1.3 percent. "The market sentiment has been dampened by a sharp drop in China's market amid record soyabean stocks," said a futures trader from Kuala Lumpur.
China's stocks of soyabean oil are at record levels after huge imports of beans this year, with 93.5 million tonnes arriving in the 2016/17 crop year that ended in September. Exports of palm oil products during Oct. 1 - 15 rose 10.3 percent to 690,074 tonnes from 625,655 tonnes shipped a month earlier, cargo surveyor Intertek Testing Services said on Monday.
Also, production in October is seen rising from a month earlier due to the higher number of working days. Meanwhile, leading edible oils analyst Dorab Mistry said on Wednesday that crude palm oil prices were forecast to rise to $800 per tonne CIF Rotterdam by January, with potential to hit $850 by March 2018.
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