Palm oil extends falls on cheaper rivals, profit-taking

SINGAPORE: Malaysian palm oil futures fell for a second straight session on Tuesday, tracking cheaper rival oils on the Dalian Commodity Exchange and the Chicago Board of Trade, and as production recovered.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange declined 2.4pc to 2,608 ringgit ($613.65) a tonne when markets closed.

It had risen for three sessions through Friday, hitting a 5-1/2-month high, as heavy rains fuelled worries about output.

"Palm oil prices are down on profit-taking," said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.

"It (palm) adjusted its spread over soybean oil and was also pressured by a recovery in palm oil production pace."

Two leading industry analysts told Reuters last week that palm prices would fall by the fourth quarter because of higher output and inventory, dampening a recent rally.

Dalian soyoil was down 2.4pc and palm oil fell 2.8pc, while CBOT soyoil slipped 1.5pc.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Demand from China is seen rising, which may help underpin palm oil prices, a trader in Kuala Lumpur said.