JAKARTA: Malaysian palm oil fell on Wednesday, sliding for a second day, and was set to end September with a small decline as it tracked a drop in China’s vegetable oil trading just before a week-long holiday.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange had dropped 1.2% to 2,777 ringgit ($668.19) a tonne by midday.
It is set to post a loss of 1.2% for the month, its first decline since April.
Dragging prices were cheaper rival oils on the Dalian Commodity Exchange and the Chicago Board of Trade (CBOT).
Dalian’s soyaaoil contract for January delivery fell 2% and its palm oil contract lost 2.3%. The CBOT soyaaoil contract for December delivery dropped 1.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
“Palm prices will range around 2,700 ringgit to 2,800 ringgit, today being Dalian’s last trading day,” a trader based in Kuala Lumpur said.
Traders in China are closing their positions before the Golden Week holiday celebrations, dragging markets down despite supply concerns, a trader said.
Palm oil may fall into a range of 2,673-2,718 ringgit per tonne, as it could have completed a bounce triggered by the support at 2,718 ringgit, Reuters technical analyst Wang Tao said.
Palm prices will be supported by improved exports data, however, said another trader in the Malaysian capital.
Malaysian palm exports jumped 10.5% in September from earlier months, cargo surveyor Amspec said on Tuesday.
“The data should give some support later as Amspec released after the market closed for the midday break,” the trader added.
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