KUALA LUMPUR: Malaysian palm oil futures fell on Wednesday after seven consecutive day of gains, as low biodiesel consumption in top producer Indonesia and expectations of a decline in exports weighed on sentiment.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed 15 ringgit, or 0.50%, lower at 2,988 ringgit ($720.17) a tonne, after rising 0.5%.
There was not much movement in palm oil prices as other competing vegetable oils were also flat, a Kuala Lumpur-based trader said.
“News on Indonesia’s biodiesel consumption was not so friendly and will keep a lid on rising prices for crude palm oil,” the trader said.
Consumption of unblended biodiesel made from palm oil in the world’s top palm producer was 6.17 million kilo litres in January-September, Andriah Feby Misna, director of bioenergy at the energy ministry, told Reuters on Wednesday.
Investors are now waiting for cargo surveyors to release export data for Oct. 1-15 on Thursday.
Exports from Malaysia during that period are rumoured to fall 2%-3.2% on-month, traders said.
However, prices were buoyed by a warning from Indonesian weather agency on Tuesday that the La Nina weather pattern, which brings heavy rainfall and could hit farm output, was expected to persist until March or April next year.
Dalian’s most-active soyaoil contract gained 0.14%, while its palm oil contract rose 1.03%. Soyaoil prices on the Chicago Board of Trade were down 0.33%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.—Reuters