Palm falls further on weakness of rival edible oils

KUALA LUMPUR: Malaysian palm oil futures fell on Thursday for a fifth straight session, weighed down by weakness in rival edible oils.

Malaysia hopes palm oil industry can be compliant with EU law when grace period ends

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange slid 54 ringgit, or 1.19%, to 4,475 ringgit ($994.44) a metric ton in early trade.

Fundamentals

• Dalian’s most-active soyoil contract fell 3.01%, while its palm oil contract shed 2.16%. Soyoil prices on the Chicago Board of Trade were down 0.25%.

• Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

• The ringgit, palm’s currency of trade, weakened 0.74% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

• India extended the suspension of trading in derivative contracts for key farm commodities including crude palm oil and rapeseed until January, as the world’s largest importer of vegetable oils and a major producer of wheat and rice seeks to curb food inflation.

• Indonesia’s plan to expand its biodiesel mandate from Jan. 1, which has fuelled concerns it could curb global palm oil supplies, looks increasingly likely to be implemented gradually, analysts said, as industry participants seek a phase-in period.

• Oil prices fell in early trading after the US Federal Reserve signalled that it would slow the pace of interest rate cuts in 2025, potentially impacting fuel demand.

• Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

• Palm oil may fall into 4,273 ringgit to 4,370 ringgit per metric ton, driven by a wave c, Reuters technical analyst Wang Tao said.