JAKARTA: Malaysian palm oil futures racked up a fourth session of losses on Tuesday, hit by prices of rival Dalian oils and overnight movements in crude oil.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 1.64% to 3,483 ringgit ($755.53) a tonne by the midday break, shedding about 10.5% in the past four sessions.
Palm prices were weighed down on Tuesday by negative global factors such as the overnight drop in crude oil prices and declines in rival oils on the Dalian exchange, a trader in Kuala Lumpur said.
Dalian’s most-active soyoil contract fell 1.44%, while its palm oil contract dropped 3.71%. Soyoil prices on the Chicago Board of Trade were trading 0.16% higher.
Oil prices fell to nine-month lows overnight, pressured by a strengthening dollar and fears of a recession, but rebounded on Tuesday on indication that OPEC+ may enact output cut to avoid a further collapse in prices.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market, while weaker crude oil makes palm less attractive for biofuel feedstock.
Last Friday, industry analyst Dorab Mistry said Malaysian palm oil prices were seen plunging to 2,500 ringgit by the end of December, weighed down by improving production, demand destruction and a slowdown in major economies.
Positive export data from cargo surveyors helped palm oil cap its losses on Tuesday, the trader said.
Exports of Malaysian palm oil products for Sept. 1-25 rose 20.9% from the same period in August, cargo surveyor Intertek Testing Services said over the weekend, while independent inspection company AmSpec Agri said exports increased 18.6%.
Palm oil may retest a support at 3,427 ringgit per tonne, as it has pierced below the Sept. 8 low of 3,481 ringgit, Reuters technical analyst Wang Tao.