Palm oil slips 1% on demand worries ahead of export data

KUALA LUMPUR: Malaysian palm oil futures fell 1% on Tuesday, down for a sixth day in seven, on concerns over declining exports ahead of cargo surveyor data and tracking rival soyoil's price drop.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange slid 42 ringgit, or 1.25%, to 3,308 ringgit ($817.60) during early trade.

Cargo surveyors are scheduled to release Jan. 1-20 export data on Wednesday, but sentiment is bearish after exports during the first two weeks of January plummeted 42% compared with a month earlier.

FUNDAMENTALS

• Malaysia's central bank is expected to cut key interest rates to historic lows on Wednesday, according to a Reuters poll, after surging coronavirus infections led the government to impose fresh lockdowns, further curbing economic activity.

  • European Union palm oil imports in the 2020/21 season that started last July had reached 3.24 million tonnes by Jan. 17, up from 3.10 million by the same time last year, data published by the European Commission showed on Monday.

  • Dalian's most-active soyoil contract fell 0.5%, while its palm oil contract declined 0.8%. Soyoil prices on the Chicago Board of Trade were down 1%.

• Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

• Palm oil may test a resistance at 3,381 ringgit, with a good chance of breaking above this level and rising into a range of 3,426 ringgit to 3,474 ringgit per tonne, Reuters technical analyst Wang Tao said.