Malaysian palm oil futures fell for a fifth consecutive day on Friday evening, hitting a fresh five-month low as the market was weighed down by concerns over high stockpiles in the country. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 percent to 2,479 ringgit a tonne at the close of trade. It earlier fell to an intraday low of 2,477 ringgit, its weakest level since July 4.
The contract is also down 4.8 percent for the week, its sixth weekly fall and sharpest weekly decline since February. Trading volumes at the break stood at 39,815 lots of 25 tonnes each on Friday evening.
"The market is concerned about high stocks, and I heard all the storage tanks are full," said a futures trader from Kuala Lumpur, adding that despite some buying activity in the market prices remained low on bearish outlooks. Palm oil inventory levels in Malaysia, the world's second-largest producer after Indonesia, are expected to rise towards the year-end as export volumes fall faster than output, weighing on prices. Stockpiles at end-November are seen rising 11.4 percent to 2.44 million tonnes on the month, according to a Reuters poll, while output is pegged to drop 3 percent to 1.95 million tonnes. Exports are forecast to fall 6 percent in November to 1.45 million tonnes from October.
Official data from the Malaysian Palm Oil Board is scheduled for release on December 12. Palm oil prices are affected by other edible oils as they compete for a share in the global vegetable oils market. The January soyabean oil contract on the Chicago Board of Trade was down 0.2 percent, while the January soyabean oil contract on the Dalian Commodity Exchange fell 1 percent. In other related oils, the Dalian January palm olein contract dipped 0.1 percent.
Comments
Comments are closed for this article.