SINGAPORE: Malaysian palm oil futures finished lower for a second session on Thursday, underpinned by weakening rival oils, while falling exports dragged prices further, even as futures rose for the week.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 30 ringgit, or 0.80%, to 3,705 ringgit ($835.40) a tonne, but edged up 0.08% for the week.
Malaysia on Thursday said it was disappointed over a European Union law banning imports of commodities linked to deforestation, fearing a hit to its exports of palm oil to the bloc.
Exports of Malaysian palm oil products for April 1-20 fell 25.8% from a month earlier, independent inspection firm AmSpec Agri Malaysia reported, while cargo surveyor Intertek Testing Services reported a 20.3% decline.
Indian buyers opted to cancel 75,000 tonnes of palm oil purchases for the first time in years and switched to rival soft oils, such as sunflower oil and soyoil, five industry officials told Reuters.
Palm oil may extend gains into 3,864-3,934 ringgit range
“India has reduced almost 400,000 tonnes of palm imports and replaced it with sunflower oil for the April-May-June period, although sources still expect import of 550,000 tonnes of palm in April and almost 700,000 tonnes in May,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Tight supplies and buyer washout have squeezed refiners, and in many cases, they’re “doing charitable service to keep their plants running”, he added.
Dalian’s most-active soyoil contract dropped 2.8%, while its palm oil contract eased 2.1%. Soyoil prices on the Chicago Board of Trade were down 0.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell to their lowest in about three weeks on Thursday, depressed by a firmer dollar and rate hike expectations which outweighed lower U.S. crude stocks.
Malaysia’s financial markets will be closed on Friday and Monday for a public holiday. Trading will resume on Tuesday, April 25.
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