KUALA LUMPUR: Malaysian palm oil futures traded lower for a second session on Monday, weighed down by weak rival edible oils, while concerns over rising output and inventory levels also pressured prices.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 34 ringgit, or 0.8%, to 4,239 ringgit ($1,002.60) a metric ton at the close.
Crude palm oil traded lower due to weakness in the Dalian and the soyoil market during Asian hours, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“Rising production and stock levels could be seen as weighing down on market sentiment as well,” he said.
Dalian’s most-active soyoil contract fell 0.49%, while its palm oil contract shed 0.42%. Soyoil prices on the Chicago Board of Trade (CBOT) lost 0.29%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Palm snaps three-week rally on profit-taking, output concerns
Oil prices edged higher as investors assessed a trade deal between the United States and the European Union, while a stronger U.S. dollar and lower oil imports by India weighed on prices.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Cargo surveyors estimated exports of Malaysian palm oil products for July 1-25 to have fallen between 9.2% and 15.2% from a month earlier.
The ringgit, palm’s currency of trade, weakened 0.24 against the U.S. dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Comments
Comments are closed for this article.