Palm oil set to end five-day rally on plunge in March exports so far

KUALA LUMPUR: Malaysian palm oil futures were set to snap a five-session rally on Wednesday, dragged down by weaker rival oils and a slump in exports during the first 10 days of March.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange slid 31 ringgit, or 0.79%, to 3,884 ringgit ($941.12) a tonne by the midday break.

Palm closed at a 10-year high in the previous session.

Exports of Malaysian palm oil products for March 1-10 fell 22% to 311,198 tonnes from the same period in February, independent inspection company AmSpec Agri Malaysia said.

The lower exports will weigh on palm, albeit on a temporary basis, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

"Competing oils like soybean and sunflower are at multi-year highs, thus palm prices will remain defensive," he added.

Malaysia's February palm oil stockpiles fell 1.8% from the previous month to 1.3 million tonnes, according to Malaysian Palm Oil Board (MPOB) data released during the midday break.

Output fell 1.85% to 1.11 million tonnes, while exports slumped 5%, the MPOB said.

Dalian's most-active soyoil contract fell 1.2%, while its palm oil contract declined 1.3%, but they were not far from a more than eight-year high hit on Monday.

Soyoil prices on the Chicago Board of Trade were down 0.5%.

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

Palm oil may revisit its Tuesday low of 3,827 ringgit, following its failure to break a resistance at 3,929 ringgit per tonne again, Reuters technical analyst Wang Tao said.