Palm falls, tracking weaker rival oils

KUALA LUMPUR: Malaysian palm oil futures slipped lower on Tuesday for a second consecutive session, tracking weaker rival edible oils.

Palm slips on poor demand from India

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 48 ringgit, or 1.11%, to 4,290 ringgit ($951.43) a metric ton in early trade.

Fundamentals

• Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.75%. Soyoil prices on the Chicago Board of Trade were down 0.6%.

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

• Oil prices extended losses to a second straight session on a technical correction after last week’s rally, while forecasts for ample supply and a firm dollar also weighed.

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

• The ringgit, palm’s currency of trade, weakened 0.04% against the dollar, making the commodity cheaper for buyers holding foreign currencies.

• Malaysia’s palm oil inventories are forecast to fall in December, for a third consecutive month, amid declining production due to recent heavy rainfall that affected the harvest, a Reuters survey showed.

• Palm oil may fall into 4,161 ringgit to 4,202 ringgit per metric ton, as it has completed a weak bounce, Reuters technical analyst Wang Tao said.