Malaysian palm oil futures slipped on Thursday evening on weaker-performing soyaoil and mixed forecasts from leading analysts at an industry conference the previous day. Benchmark palm oil futures for May delivery on the Bursa Malaysia Derivatives Exchange were down 1.3 percent at 2,839 ringgit ($636.69) a tonne at the end of the trading day.
Traded volumes finished at 59,891 lots of 25 tonnes each. "Soyaoil closed lower last night whereas Dalian is marginally down this morning," a Kuala Lumpur trader said, referring to palm's rival oilseed soya on the Chicago Board of Trade and China's Dalian Commodity Exchange. The trader added that speakers had provided mixed forecasts at an industry conference in Kuala Lumpur on Wednesday.
"Production will increase this year, but stocks build-up is a big question. Biodiesel policies in the US are not clear as yet under President Trump," he said. "The short-term market outlook is supportive due to tightness, but the long term remains uncertain."
Leading analysts at the conference said that current prices levels are unsustainable and the market, though supported by current tight supplies, is seen falling to 2,500 ringgit a tonne around mid-year as production rebounds. Palm prices are usually affected by the movements of competing edible oils in the global vegetable oils market. Soyabean oil on the Chicago Board of Trade fell as much as 0.7 percent, while the May soyabean oil contract on the Dalian Commodity Exchange was trading flat.
Palm oil production in top growers Malaysia and Indonesia is still reeling from a crop-damaging El Nino in 2015-16. Output is expected to recover by mid-year as the impact on palm's fresh fruit yields begins to recede. In related oils, the May contract for palm olein on the Dalian Commodity Exchange rose 1.2 percent.
Comments
Comments are closed for this article.