Palm slips over 1% on weaker soyoil, bearish MPOB data

KUALA LUMPUR: Malaysian palm oil futures slipped more than 1% on Thursday, extending losses for a third straight session, as weakness in rival soyoil and bearish demand and supply figures pressured the market.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 81 ringgit, or 1.63%, to 4,885 ringgit ($1,202.61) a metric ton at the close.

The market traded lower mainly due to weaker soybean oil prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

Overall, the Malaysian Palm Oil Board’s data also looks bearish with the stocks climbing month-on-month higher than what the market had expected, Ng said.

“The sluggish pace of exports combined with higher output growth is the main reason leading to the stock buildup,” he said.

Malaysia’s palm oil inventories hit an eight-month high in August as production climbed to the highest level since December and exports declined, data from MPOB showed.

Cargo surveyors also estimated that exports of Malaysian palm oil products for September 1-10 fell between 11.7% and 17.5% from a month earlier.

Oil prices rose, extending gains that took Brent over $100 a barrel in the previous session, as traders braced for deeper supply disruptions after Iran and the United States launched their largest attacks on shipping since their six-month-old conflict began.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Dalian’s most-active soyoil contract fell 0.64%, while its palm oil contract shed 1.37%. Soyoil prices on the Chicago Board of Trade were down 0.55%.

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 0.17% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.