KUALA LUMPUR: Malaysian palm oil futures slipped more than 2% on Thursday, as an industry group forecast improving production for early-March, with weaker Dalian oils weighing on the market further.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 143 ringgit, or 2.36%, to 5,924 ringgit ($1,414.52) a tonne by the midday break.
Palm has already dropped nearly 12% so far this week, erasing most of the war risk premium accrued when Russia invaded Ukraine in late-February.
Palm oil may bounce into 6,548-6,686 ringgit range
Market is slower on lack of fresh news, but it seems to be under pressure on expectations of higher production, a Kuala Lumpur-based trader said.
The Southern Peninsula Palm Oil Millers’ Association estimated March 1 to 15 output to rise 33% from the month before, traders said on Wednesday.
Dalian’s most-active soyoil contract fell 0.4%, while its palm oil contract were down 1.1%. Soyoil prices on the Chicago Board of Trade were up 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices climbed after the International Energy Agency (IEA) said markets could lose three million barrels per day (bpd) of Russian crude and refined products from April, making palm a more attractive option for biodiesel feedstock.
Palm oil may slide to 5,744 ringgit per tonne to complete a wave c from 7,268 ringgit, Reuters technical analyst Wang Tao said.
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