JAKARTA: Malaysian palm oil futures fell for a second straight session on Monday after weak export data from the world's second-biggest palm oil producer, while a slump in crude oil prices added to subdued sentiment around the edible oil.
At the midday break, the benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was down 1.2 percent at 2,020 ringgit ($481.99) per tonne.
Traded volumes stood at 18,015 lots of 25 tonnes each. <1FCPO-TOT>
"The market is depressed," said a Kuala Lumpur based trader, referring to recent export data indicating weak demand, but noted that prices had stabilised after recent volatility and would likely remain at this level for the next several weeks.
The Malaysian palm oil benchmark slumped to a near three-year low earlier this month due to high inventories, rising production and sluggish demand.
Traders are looking to upcoming G20 meeting later this week in Buenos Aires for clues on how commodities markets will look in 2019.
"There's a lot of uncertainty around the U.S. and China's trade pact," the trader said.
Malaysia's announcement on Monday of revisions to its bio-diesel content rules would likely be supportive for palm oil in the intermediate and long-term, he said.
The so-called B10 biodiesel programme will raise the minimum bio-content that local producers must put in biodiesel to be used in transport to 10 percent from 7 percent at present, potentially boosting demand for palm oil as a feed-stock.
Exports of Malaysian palm oil products for November 1 - 25 fell 2.6 percent to 1,041,433 tonnes from 1,068,662 tonnes shipped during October 1 - 25, cargo surveyor Intertek Testing Services said on Sunday. Exports in October fell 14.1 percent.
In other related oils, the Chicago soybean oil contract for December was down 0.1 percent, while the
January soybean oil contract on the Dalian Commodity Exchange gained 0.4 percent.
Meanwhile, the Dalian January palm oil contract was down 0.6 percent.
Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market.
Crude oil prices, which also affect the palm oil market, slumped nearly 8 percent to the lowest in more than a year on
Friday, posting the seventh-consecutive weekly loss, amid intensifying fears of a supply glut.
Comments
Comments are closed for this article.