JAKARTA: Malaysian palm oil futures declined for a third straight session on Tuesday following a forecast for stronger production of top vegetable oils next year.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 1.79% to 4,870 ringgit ($1,160.35) by closing time.
It reversed from earlier gains of 1.33% and extended losses of 0.78% over the previous two sessions.
“Selling activities came in as Thomas Mielke called for higher edible oil output in 2022,” a Kuala Lumpur-based trader said.
Global production of the top four vegetable oils - palm, sunflower, soy and rapeseed oils - is likely to rise the most in four years, head of Hamburg-based analyst firm Oil World Thomas Mielke said, climbing by 6.3 million to 6.8 tonnes in the 2021/2022 crop year altogether.
Prices of Dalian’s most-active soyoil contract also gave up earlier gains to drop 1.72% in afternoon trade, while its palm oil contract fell 3.04%.
Soybean oil prices on the Chicago Board of Trade for January delivery traded 1.11% lower.
Prices of vegetable oils affect each other as they compete for a share in the global vegetable oils market.
Palm oil looks neutral in a range of 4,926 ringgit to 5,002 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.