MUMBAI: Malaysian palm oil futures ended a volatile session flat on Tuesday, as a drop in inventories offset a slowdown in December exports.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 2 ringgit or 0.05%, at 3,739 ringgit ($798.59).
The contract had climbed to 3,786 ringgit earlier in the day, but relinquished those gains on slowing exports.
Exports of Malaysian palm oil products for Dec. 1-10 fell 4.1% to 7.4% from the Nov. 1-10 period, cargo surveyors said.
Countering the decline in exports, data from industry regulator Malaysian Palm Oil Board (MPOB) showed stocks at the end of November fell for the first time in seven months as production slumped more than exports.
The decline in palm oil output and inventories by the end of November counterbalanced the decrease in exports during the first 10 days of December, said a Mumbai-based dealer with a global trade house.
Palm oil closes with 3.43% weekly loss
“The production drop in November was significant, and it’s expected to decline even further in December,” the dealer said.
Contrasting the weaker palm oil prices, rival soyoil futures on the Chicago Board of Trade were up 0.61%. Palm oil is affected by price movements in related oils as they compete for a share of the global market.
Weather forecasts show northern half of Brazil may still not be getting enough rain to offset drought conditions, which have delayed planting and threatened soybean crop.
Palm oil may break a resistance zone of 3,775-3,781 ringgit per ton, and rise into a range of 3,813-3,835 ringgit, Reuters’ technical analyst Wang Tao said.
Indonesia will continue its mandatory 35% biodiesel blending in 2024 and has allocated 13.41 million kilolitres of biodiesel for next year, slightly higher than 13.15 million kilolitres in 2023. Palm oil is used as feedstock to make biodiesel.
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