Palm slips on weaker crude oil, profit taking

Usama Fayyaz August 15, 2019

KUALA LUMPUR: Malaysian palm oil futures edged down at the midday break on Thursday, weighed by lower crude oil prices and profit-taking after seven consecutive days of gains.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was last down 0.7pc at 2,203 ringgit ($525.52) per tonne, but still holding near a four-month high.

Palm oil prices have gained over 6pc since the start of the month, and rose to a four-and-a-half-month high of 2,223 ringgit in its previous trading session.

“The market is overdone after seven straight days of gains, today it is tracking weaker crude oil,” said a Kuala Lumpur-based trader.

Oil prices fell on Thursday, adding to sharp overnight losses as US crude inventories unexpectedly rose, fears of recession mounted and economic data out of China and Europe disappointed.

Palm oil prices are impacted by movements in crude oil as the vegetable oil is used as feedstock to make biodiesel, a fuel substitute.

In other related edible oils, US soyoil futures on the CBOT was slightly up 0.03pc on Thursday, while the September soyoil contract on the Dalian exchange rose 0.5pc.

The Dalian September palm oil contract gained 0.2pc.

Palm oil prices are also affected by movements in related oils that compete in the global vegetable oils market.

Copyright Reuters, 2019

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