KUALA LUMPUR: Malaysian palm oil futures closed more than 1percent lower on Thursday, snapping five straight sessions of gains, pressured by weak rival soyoil and November export figures.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 73 ringgit, or 1.73 percent, to 4,153 ringgit (USD999.76) a metric ton at the close.
The contract traded lower, tracking weakness in the soybean oil market, amid talks that the United States could delay proposed cuts to imported biofuel incentives, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
US President Donald Trump’s administration is considering delaying for one or two years its proposed cuts in incentives for imported biofuels amid pressure from US refiners who argue the move could raise costs and tighten fuel supplies.
Dalian’s most-active soyoil contract fell 1.84 percent, while the palm oil contract shed 2.26percent. Soyoil prices on the Chicago Board of Trade were down 0.16percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Cargo surveyors estimated that exports of Malaysian palm oil products for November 1-20 fell between 14.1 percent and 20.5 percent from a month earlier.
India’s palm oil imports are expected to rebound by nearly 20percent in the new marketing year, driven by competitive pricing that is helping the tropical oil regain market share, the head of an industry body said.
Crude palm oil prices are expected to rebound toward 4,500 ringgit (USD1,081.21) per metric ton by the end of the year, driven by festive demand and a slowdown in output, the Malaysian Palm Oil Council said.
Oil prices edged up after falling in the previous session as a bigger-than-expected draw in US crude stockpiles offset speculation that a US push to end the Russia-Ukraine war may add barrels to an amply supplied market.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.14percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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