MUMBAI/NEW DELHI: Malaysian palm oil futures fell for the third straight session on Monday after hitting a one-year high last week, as losses in rival soybean oil prompted profit booking.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 45 ringgit or 1.04%, to 4,298 ringgit ($905.03) a metric ton. Falling stocks have lifted palm oil prices in recent weeks, but the rally has caused its premium over soybean and sunflower oil to rise, said a Mumbai-based dealer with a global trade house.
“As a result, palm oil buyers are shifting to other oils. Prices need to come down to avoid a slowdown in demand and exports in the coming months,” he said.
India’s palm oil imports fell to their lowest level in 10 months in March as buyers substituted it with cheaper sunflower oil. The market is now eagerly awaiting data on Malaysia’s March exports, production and stock levels, said Anilkumar Bagani, head of Research from India-based Sunvin Group said.
Malaysia’s palm oil inventories are expected to have declined 6.65% from the prior month to an eight-month low of 1.79 million tons at the end of March, a Reuters survey showed on Thursday.
The Malaysian Palm Oil Board is scheduled to release the data on April 15. Soyoil prices on the Chicago Board of Trade fell 1.66%. Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
Palm oil may slide further into a range of 4,274 ringgit to 4,294 ringgit per metric ton, due to the completion of a five-wave cycle from 3,745 ringgit.
Oil prices fell more than $1 a barrel on Monday, with Brent sliding under $90, as Middle East tensions eased after Israel withdrew more soldiers from southern Gaza. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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