KUALA LUMPUR: Malaysian palm oil futures slumped on Thursday, easing from a record closing high in the previous week, as traders booked profits while slower April exports also weighed.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 348 ringgit, or 4.9%, to 6,756 ringgit ($1,554.18) a tonne by the midday break.
Palm fell on profit-taking and investors factored in price movements in soybean oil after an extended break, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
“Weaker April exports and expectations of higher output pushing stocks higher will also weigh on the futures contract,” Varqa added.
Exports of Malaysian palm oil products for April fell between 13.9% and 16% from March, cargo surveyors said on Saturday.
The contract soared 11.8% last week to close at a record high after top producer Indonesia imposed a temporary export ban on crude and refined palm oil, deepening concerns about global edible oil supply already affected by the conflict in Ukraine.
Indonesia’s export ban does not raise concern for the supply to the European Union market as the bloc has reserves for several weeks, EU vegetable oil group FEDIOL said on Tuesday.
Further pressuring prices, the ringgit, palm’s currency of trade, rose 0.11% against the dollar after the US Federal Reserve raised its benchmark overnight interest rate by half a percentage point.
A stronger ringgit makes palm oil more expensive for holders of foreign currencies.
Dalian’s most-active soyoil contract fell 2%, while its palm oil contract eased 2.4%. Soyoil prices on the Chicago Board of Trade fell 0.04%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Comments
Comments are closed for this article.