JAKARTA: Malaysian palm oil futures fell on Monday, weighed by weakness in rival Dalian vegetable oils and crude oil, although weakness in the Malaysian ringgit and strong export data limited losses.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 19 ringgit or 0.5% to 3,752 ringgit ($783.30) a metric ton.
The contract rose 0.91% last week in its second consecutive weekly gain.
Futures opened gap lower following weakness in Chinese vegetable oil future in Asian hours and a decline in crude oil prices, said Anilkumar Bagani, commodity research head of Mumbai-based Sunvin Group.
“Palm oil is also down on a lacklustre movement in European rapeseed oil markets on Friday,” he added.
Dalian’s most-active soyoil contract fell 1.13%, while its palm oil contract was down 1.24%. Meanwhile, soyoil prices on the Chicago Board of Trade rose 0.49%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Crude oil prices slipped on Monday as investors continued to focus on the situation in the Middle East, where diplomatic efforts are intensifying in an attempt to contain the conflict between Israel and Hamas.
Weaker crude makes palm a less attractive option for biodiesel feedstock.
“The robust Oct. 1-20 palm oil export performance and a stronger Indian palm oil purchases along with a weaker ringgit has limit the decline,” Bagani said.
Exports of Malaysian palm oil products for Oct. 1-20 were estimated to have risen between 7.9% and 9.9% from a month earlier, data from AmSpec Agri Malaysia and Intertek Testing Services showed.
Malaysian ringgit, the contract currency of trade fell 0.52% against the dollar and hit its lowest since 1998, making palm oil more attractive for foreign currency holders.
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