KUALA LUMPUR: Malaysian palm oil futures reversed early gains on Thursday as investors booked profit after prices hit a seven-week high, but uncertainties over global edible oil supply kept the market supported.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange fell 18 ringgit, or 0.44%, to 4,100 ringgit ($867.36) a tonne, snapping a four-session rise.
Investor sentiment was also weighed down by data from cargo surveyor Societe Generale de Surveillance that showed exports for Oct. 1-20 fell 8.4% from the month before.
Meanwhile, another cargo surveyor, Amspec Agri, estimated a 3.3% rise in exports for the same period.
“Export demand from destinations like Europe, India and Pakistan continued to be there due to a wider palm oil discount over competing edible oils,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“But Malaysia’s export pace is easing due to Indonesia’s lower export taxes and export levy waiver.”
Concerns over rainy weather-triggered reduced production in top producers Indonesia and Malaysia, as well as fears of higher Indian import taxes, helped support prices.
There are also worries over the availability of Black Sea sunflower oil exports as a grain corridor deal between Russia and Ukraine looks uncertain, said Bagani.
Russia’s Deputy U.N. Ambassador Dmitry Polyanskiy told reporters on Thursday that he was not optimistic about the renewal of a U.N.-brokered deal that resumed Ukraine’s Black Sea exports of grain and fertiliser.
In related oils, Dalian’s most-active soyoil contract rose 0.9%, while its palm oil contract gained 1.8%. Soyoil prices on the Chicago Board of Trade rose 0.05%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia will hold a general election on Nov. 19, its election commission said, in a contest that the ruling graft-tainted party hopes will strengthen its hold on power.