NEW DELHI: Malaysian palm oil futures opened lower on Wednesday, dragged down by weak demand from top overseas buyers of the tropical oil.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 0.4% at 3,690 ringgit ($779.80) a metric ton in early trade.
Palm oil futures dropped 6.06% on a monthly basis in September after posting two consecutive monthly gains.
Palm ends higher after two losing sessions as soyoil jumps
Fundamentals
The Dalian Commodity Exchange is closed from Sept. 29 to Oct. 6 for Mid-Autumn Festival and National Day. Soyoil prices on the Chicago Board of Trade were up 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Indonesia’s Palm Oil Association expects a 5% increase in the country’s output of the commodity this year and sees stocks at around 3.2 million metric tons by the year’s end.
Exports of Malaysian palm oil products for September were seen rising between 5.4% and 8.1%, independent inspection company AmSpec Agri Malaysia and cargo surveyor Intertek Testing Services data showed.
Indonesia raised its crude palm oil reference price to $827.37 a ton for the Oct. 1-15 period, which kept export tax and levy for crude palm oil unchanged at $33 and $85 per ton.
Malaysian palm oil is expected to trade between 3,700 and 4,500 ringgit ($790-$960) per metric ton from now until mid-2024, as an El Niño weather pattern threatens supplies amid rising demand, analyst said.
Palm oil may revisit its Sept. 21 low of 3,637 ringgit per metric ton, as its bounce triggered by the support of 3,686 ringgit has almost been reversed.
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