JAKARTA: Malaysian palm oil futures extended losses on Thursday, snapping a two-session rally, as investors booked profits and prices of rival edible oils fell.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange dropped 44 ringgit, or 1.11%, to 3,904 ringgit ($923.59) a metric ton at the close.
“The palm oil futures were seen trading lower on profit taking, energy prices and weaknesses in related China and US vegetable oil markets,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
Dalian’s most-active soyoil contract fell 0.18%, while its palm oil contract declined 0.37%. Soyoil prices on the Chicago Board of Trade were down 0.58%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices steadied on Thursday after falling more than 1% the previous day because of a build in US gasoline and diesel inventories and cuts to Saudi Arabia’s July prices for Asia.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Malaysia’s palm oil inventories are projected to climb for a third consecutive month in May, driven by a modest recovery in production despite robust export demand, a Reuters survey showed on Wednesday.
Palm oil rebounds on anticipation of strong demand
India’s palm oil imports in May surged to a six-month high, as lower inventories and the tropical oil’s discount to rival soyoil and sunflower oils prompted refiners to increase purchases.
Independent inspection company AmSpec Agri Malaysia said exports of Malaysian palm oil products for May rose 13.2%, while cargo surveyor Intertek Testing Services saw a 17.9% jump.
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