KUALA LUMPUR: Malaysian palm oil futures fell on Friday for a third straight session to a near one-month low, as fresh COVID-19 restrictions in top buyer China heightened concerns over demand for palm, crude oil and other commodities.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 80 ringgit, or 2%, to 3,914 ringgit ($873.27) a tonne by the midday break, their lowest since Aug.
- For the week, the contract is set for a 6.2% slump.
Traders are turning their focus to production data for August ahead of a report by the Malaysian Palm Oil Board due next week, with a particular attention on inventories, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Many are expecting production to rise as the peak harvest months arrive, but they are also concerned that poor demand might lead to a build-up of stocks.
Adding to the fears, the southern Chinese tech hub of Shenzhen tightened COVID-19 curbs, while the southwestern metropolis of Chengdu announced a lockdown of its 21.2 million citizens.
Palm ends at near one-month low
Dalian’s most-active soyoil contract fell 4.4%, while its palm oil contract dropped 5.2%.
Soyoil prices on the Chicago Board of Trade were down 0.4%.
Palm oil may test a support at 3,857 ringgit per tonne, a break below could open the way towards 3,598-3,717 ringgit range, Reuters technical analyst Wang Tao said.
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