KUALA LUMPUR: Malaysian palm oil futures slipped for a second consecutive session on Monday, on cautious investor sentiment and expectations of rising inventories as output increases pressured the market.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 48 ringgit, or 1.06 percent, to 4,496 ringgit (USD1,064.14) a metric ton at the close.
Crude palm oil prices traded lower due to market risk-off sentiment and expectations of rising stock levels in the coming weeks amid increasing production, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract fell 0.67 percent, while its palm oil contract shed 1.31 percent. Soyoil prices on the Chicago Board of Trade were up 0.3 percent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices rose after hitting five-month lows in the previous session, as investors focused on potential talks between the presidents of the United States and China that could ease trade tensions between the world’s two largest economies and oil consumers.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.07 percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Cargo surveyors estimated that exports of Malaysian palm oil products for October 1-10 rose between 9.9 percent and 19.4 percent compared with the same period a month earlier.
The Malaysian government estimates the average price of crude palm oil to range between 3,900 ringgit (USD925.05) and 4,100 ringgit per metric ton next year, due to higher global production and increased output of rival oils.
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