KUALA LUMPUR: Malaysian palm oil futures slipped on Thursday on a weaker performing soyoil, and as leading analysts presented mixed forecasts at an industry conference earlier this week.
Benchmark palm oil futures for May delivery on the Bursa Malaysia Derivatives Exchange were down 0.2 percent at 2,870 ringgit ($643.93) a tonne during the midday break.
Traded volumes stood at 17,496 lots of 25 tonnes each at noon.
"Soyoil closed lower last night whereas Dalian is marginally down this morning," said a trader from Kuala Lumpur, referring to palm's rival oilseed soy on the Chicago Board of Trade and China's Dalian Commodity Exchange.
The trader added that speakers had provided mixed forecasts at an industry conference in Kuala Lumpur on Wednesday.
"Production will increase this year, but stocks build-up is a big question. Biodiesel policies in the US are not clear as yet under President Trump," he said. "The short-term market outlook is supportive due to tightness but the long-term remains uncertain."
Leading analysts at the conference say current prices levels are unsustainable, and while current tight supplies will support the market, it is seen falling to 2,500 ringgit a tonne around mid-year as production rebounds.
Palm prices are usually impacted by the movements of other related edible oils, as they compete for a share in the global vegetable oils market.
Soybean oil on the Chicago Board of Trade fell as much as 0.2 percent, while the May soybean oil contract on the Dalian Commodity Exchange was slightly up by 0.1 percent.
Palm oil production in top growers Malaysia and Indonesia is still reeling from the impact of a crop-damaging El Nino in 2015-2016, as the dry weather phenomenon reduces palm's fresh fruit yields. Output is expected to recover by mid-year as the impact wears off.
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