Palm oil closes lowest in more than 5 months on concerns over rising stocks

KUALA LUMPUR: Malaysian palm oil futures tumbled on Tuesday for a third consecutive session, weighed by weaker rival oils and concerns over rising stocks amid softer exports. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange slid 52 ringgit, or 1.3percent, to 3,961 ringgit (USD969.88) a metric ton, hitting its lowest closing price since June 26.

Crude palm oil futures were seen trading lower following overall weakness in the global vegetable oil markets, said Anilkumar Bagani, commodity research head at Sunvin Group, a Mumbai-based brokerage.

The persistently weaker Malaysian palm oil export performance has raised the risk of a further increase in palm oil stocks, while the stronger ringgit is adding to market pressure, Bagani added. Dalian’s most-active soyoil contract fell 0.83percent, while its palm oil contract shed 0.97 percent. Soyoil prices on the Chicago Board of Trade were down 0.99 percent.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Cargo surveyors estimated that exports of Malaysian palm oil products for December 1-15 fell between 15.9 percent and 16.4 percent from a month earlier. The ringgit, palm’s currency of trade, strengthened 0.15percent against the dollar, making the commodity more expensive for buyers holding foreign currencies. Oil prices fell, adding to the previous session’s losses, as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations of a potential easing of sanctions.