KUALA LUMPUR: Malaysian palm oil futures tumbled for a third straight session on Tuesday, pressured by weak demand from key destination markets.
The Bursa Malaysia Derivatives Exchange’s benchmark contract slid 34 ringgit, or 0.71%, to 4,724 ringgit ($1,058.01) a metric ton at the close.
Futures were pressured by lower overnight Chicago soyoil futures and lack of fresh demand from destination markets amid deep negative import margins, especially in India, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin group.
Paramalingam Supramaniam, director at Selangor-based brokerage firm Pelindung Bestari, said prices plunged following a massive long liquidation by funds, a trend that is believed will continue for an extended period.
“Until we see a potential return of bona fide buying interest in the cash market, the bumper crop in the U.S added with book closing for the year end, the market will continue to remain under selling pressure.
“Fundamentals such as weaker production and the possibility of end stocks plummeting below 1.5 million metric tons by February did little to ease market sentiment,” he said.
Palm rebounds on stronger rival Dalian oils, weaker ringgit
Dalian’s most-active soyoil contract fell 0.23%, while its palm oil contract shed 1.2%. Soyoil prices on the Chicago Board of Trade were up 0.07%.
Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.34% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices were down as China’s economic data renewed demand concerns, while investors remained cautious ahead of the U.S. Federal Reserve’s interest rate decision.
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