JAKARTA: Malaysian palm oil futures fell more than 1% on Monday, weighed by weakness in rival vegetable oils and crude oil, although strong export data and weakness in the Malaysian ringgit limited losses.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 38 ringgit or 1.01% to 3,733 ringgit ($781.29)a metric ton in early trade.
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 commodity research head of Mumbai-based Sunvin Group, Anilkumar Bagani.
“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 1.28%, while its palm oil contract was down 1.24%. Soyoil prices on the Chicago Board of Trade rose 0.44%. 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 slid more than $1 as diplomatic efforts grew over the weekend to contain a conflict between Israel and Hamas, amid worries of a wider confrontation in the oil-rich region and pressure on supplies.
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 0.27% against the dollar, making palm oil more attractive for foreign currency holders.
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