JAKARTA: Malaysian palm oil futures fell on Tuesday after closing at their highest since mid-June 2022 in the previous session, pressured by weakness in soyoil and crude oil.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 82 ringgit or 1.58%, to 5,114 ringgit ($1,155.45) a metric ton by midday, snapping a four-session rally.
“Sharp drop in crude oil futures and weakness in the competing vegetable oils could see lower Bursa Malaysia Derivatives CPO futures,” said a Kuala Lumpur-based trader.
Dalian’s most-active soyoil contract fell 1.92%, while its palm oil contract barely changed, up 0.02%. Soyoil prices on the Chicago Board of Trade were down 1.62%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Crude oil prices inched lower ahead of OPEC’s monthly report after China’s stimulus plan and oversupply concerns took the wind out of markets in prior sessions.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. Exports of Malaysia’s palm oil products in the Nov. 1-10 period declined between 14.6% and 15.8% compared to the same period a month ago, according to surveyors AmSpec Agri Malaysia and Intertek Testing Services (ITS).
Malaysia’s palm oil stocks shrank the most in seven months in October as exports surged, production fell and domestic consumption increased, the country’s industry regulator said on Monday.
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