JAKARTA: Malaysian palm oil futures extended losses into a third session on Wednesday, dragged down by lacklustre performances in Chicago soyoil and Dalian vegetable oils, while strong export data and weakness in the ringgit currency limited losses.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange lost 14 ringgit, or 0.35%, to 4,029 ringgit ($912.98) a metric ton by the midday break. The contract hit a more than six-month low in early trade.
“Palm futures is tracking spillover weakness from the external markets,” a Kuala Lumpur-based trader said, adding that expectation of a seasonal output growth also pressured the price.
Meanwhile, strong export data for the April 1-15 period limited losses, the trader said.
Exports of Malaysian palm oil products for April 1-15 estimated to rise between 13.6% and 17% from a month ago, said cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Dalian’s most-active soyoil contract was down 0.1%, while its palm oil contract plunged 1.08%. Soyoil prices on the Chicago Board of Trade (CBOT) lost 0.59%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil falls on estimates of improved output, weak rivals
Malaysia has maintained its May export tax for crude palm oil at 10% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Malaysian ringgit, the contract currency of trade, weakened 0.07% against the U.S. dollar on Wednesday. A weaker ringgit make the contract more attractive for foreign currency holders.
Palm oil may bounce into a range of 4,119-4,176 ringgit per ton, as it has stabilized around support at 4,026 ringgit, Reuters technical analyst Wang Tao said.
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