JAKARTA: Malaysian palm oil futures fell for a third straight session on Tuesday to its lowest closing in nearly 12 weeks, tracking weakness in rival Dalian and Chicago edible oils, while a stronger ringgit also added pressure.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 58 ringgit, or 1.33%, to 4,315 ringgit ($1,021.54) a metric ton at closing.
“Continuation of weakness in Dalian palm olein and ringgit strength has kept crude palm oil prices in negative territory,” a Kuala Lumpur-based trader said.
Indonesia’s palm oil output could rise to around 56 million metric tons, higher than previous projections, with production supported by favourable weather and strong prices, Indonesia’s palm oil association GAPKI said on Tuesday.
Dalian’s most-active soyoil contract was down 0.53%, while its palm oil contract fell 1.67%. Soyoil prices on the Chicago Board of Trade lost 0.37%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit palm’s currency of trade, strengthened 0.24% against the dollar. A stronger ringgit makes palm oil more expensive for buyers holding foreign currencies.
Oil prices fell 2% on Tuesday, marking their third day of declines, as investors assessed the effect of U.S. sanctions on Russia’s two biggest oil companies along with a potential OPEC+ plan to raise output.
A weaker crude oil made palm oil a less attractive feedstock for biodiesel.
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