KUALA LUMPUR: Malaysian palm oil futures slipped on Monday, as concerns that recent high prices may dampen future demand weighed on the market.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange fell 36 ringgit, or 0.79%, to 4,493 ringgit ($1,068.49) a metric ton at the close. The contract rose 1.55% in the previous session.
Crude palm oil futures traded lower, retracing some of last week’s gains, as recent high prices may curb future demand, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“A narrowing spread between soybean oil and palm oil also makes palm oil less competitive. We see support at 4,450 ringgit and resistance at 4,600 ringgit,” he added.
Dalian’s most-active soyoil contract rose 0.57%, while its palm oil contract added 0.38%. Soyoil prices on the Chicago Board of Trade were down 0.22%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Palm rises for three consecutive weeks on strong rival oils
Cargo surveyors estimated that exports of Malaysian palm oil products for August 1-25 rose between 10.9% and 16.4% from a month earlier.
Oil prices climbed as traders weighed concerns that Russian supply could be disrupted by more U.S. sanctions and Ukrainian attacks targeting energy infrastructure in Russia.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.47% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Indonesia urged the European Union to scrap countervailing duties on imports of biodiesel immediately, after the World Trade Organization backed several of Jakarta’s main claims in a complaint to the trade body.
Comments
Comments are closed for this article.