KUALA LUMPUR: Malaysian palm oil futures fell on Monday to their lowest closing in over two weeks, weighed down by lacklustre global demand and weaker crude as traders shrugged off data indicating tightening inventories.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 80 ringgit, or 1.87%, to 4,202 ringgit ($879.63) a metric ton, its lowest closing since March 29.
“Market got some support from the resumption of Chinese palm oil buying on Friday but other destinations were lacking charm,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Malaysia’s palm oil stocks at the end of March fell 10.68% from the previous month to 1.71 million metric tons, the lowest in 10 months, as a surge in exports overshadowed output, according to Malaysian Palm Oil Board data.
Malaysian palm oil futures down
Crude palm oil production gained 10.57% to 1.39 million tons for the period, while palm oil exports ticked up 28.61% to 1.32 million tons, according to the data.
Production in April will likely be smaller than in March due to slower harvesting during the Ramadan and Eid al-Fitr holidays during the first half of the month, which would further deplete inventories, Bagani said.
Exports from Malaysia for April 1-15 rose 9.2% to 633,680 metric tons from March 1-15, cargo surveyor Intertek Testing Services said. Another cargo surveyors, Amspec Agri Malaysia, said exports rose 28.5% to 697,449 tons.
Oil prices slipped by about 1% on Monday, with the market downplaying the risk of broader regional conflagration after Iran’s weekend attack on Israel.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract rose 0.24% while its palm oil contract lost 1.89%. Soyoil prices on the Chicago Board of Trade were up 0.48%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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