JAKARTA: Malaysian palm oil futures fell to their lowest closing level in 10 weeks on Tuesday, as weakness in rival Dalian vegetable oils and market expectations of rising inventory in September weighed. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 38 ringgit, or 0.81 percent, at 4,626 ringgit (USD1,134.66) a metric ton at closing, the lowest since July 21.
A Kuala Lumpur-based trader noted, “Bearish market sentiment on expectations of high endstocks due to high production with lower export figures for September.” Exports of Malaysian palm oil products for September 1-25 likely fell between 15.1percent and 24.3 percent from a month earlier, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said.
Malaysian palm oil inventory in August-end had climbed to the highest level in eight months. Dalian’s most-active soyoil contract fell 0.09percent, while its palm oil contract shed 1.14percent.
Soyoil prices on the Chicago Board of Trade were up 0.44percent. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The contract still targets a range of 4,588 ringgit to 4,622 ringgit per ton, as suggested by a projection analysis, Reuters technical analyst Wang Tao said.
Palm oil could trade at a premium to soyoil in 2027 as El Niño threatens production and rising biodiesel demand in top exporter Indonesia tightens supplies, a senior industry official told Reuters on Tuesday.
Indonesia’s palm oil exports in July stood at 3.19 million tons, down 9.87percent from a year earlier, palm oil association GAPKI said.
Comments