JAKARTA: Malaysian palm oil futures dropped for a third day on Monday after rival oils turned negative and dragged on sentiment for palm despite strong export data.
The benchmark palm oil contract for April delivery fell 0.33% to 3,918 ringgit ($898.62) per tonne by the end of the afternoon session, extending a 1.60% loss posted over the previous two sessions.
Palm gained as much as 0.79% earlier on Monday before reversing its movement.
The Feb. 1-10 export data “should be supportive, yet our market is influenced by Dalian behaviour,” said a trader in Kuala Lumpur, adding that market participants would likely wait for the Feb. 1-15 export data to decide their further move.
Palm oil posts weekly gain on export surge
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Exports of Malaysian palm oil products for Feb. 1-10 rose between 23.3% and 39.3% from Jan.1- Jan.10, cargo surveyors said.
Dalian’s most-active soyoil contract eased from its 1.11% gain to close 0.39% lower, while its palm oil contract fell 1.22%. Soyoil prices on the Chicago Board of Trade were down 0.92%.
Meanwhile, some traders were cautiously monitoring Indonesia’s export policy as last week the world’s top palm oil exporter said it would review its palm oil export quota ratios amid rising prices of cooking oil at home.
Previously, it had said it was suspending some export permits.
An official on Monday said the review was still ongoing and the government continued to asses market conditions.
Indonesia’s plans to restrict palm oil exports are unlikely to create a shortage in top consuming market India, where stocks have risen to a record high following aggressive imports in the past three months, industry officials said.
Palm oil may retest the support of 3,859 ringgit per tonne, a break below which could be followed by a drop to 3,708 ringgit, Reuters technical analyst Wang Tao said.
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