KUALA LUMPUR: Malaysian palm oil futures slumped on Tuesday, ending a seven-day rally due to higher end-September stocks and slowing early October exports.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 145 ringgit, or 3.78%, to 3,692 ringgit ($790.41) a tonne.
Malaysia’s end-September palm oil inventories rose 10.5% from the previous month to 2.32 million tonnes, the highest in nearly three years, according to Malaysian Palm Oil Board (MPOB) data.
Output gained 2.6% to 1.77 million tonnes, while palm oil exports jumped 9.3% to 1.42 million tonnes, the MPOB data showed.
Inventories were much higher than expected, elevated by large stocks from the previous month, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Exports of Malaysian palm oil products for Oct. 1-10 fell 17.3% from the same week in September, according to cargo surveyor Intertek Testing Services. Another cargo surveyor, AmSpec Agri Malaysia, said exports during the period rose 0.5%.
In top producer Indonesia, palm oil inventories at end-August fell to 4.04 million tonnes from 5.91 million tonnes a month earlier, as exports jumped, data from industry group the Indonesian Palm Oil Association (GAPKI) showed on Tuesday.
Fundamentally, the market is bearish but it has good support from bullish crude oil and competing vegetables oil prices due to the escalating war in Ukraine, Varqa said.
Dalian’s most-active soyoil contract rose 0.6%, while its palm oil contract gained 1.8%. Soyoil prices on the Chicago Board of Trade fell 1.5%.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
Global palm oil purchases are rising this quarter as buyers take advantage of the tropical oil’s widening discount to rival soyoil which should entice price sensitive consumers and boost biofuel usage, according to senior industry officials.
Comments
Comments are closed for this article.