Palm oil closes lower tracking rival soyoil

JAKARTA: Malaysian palm oil futures closed down on Monday, weighed down by weakness in rival Dalian and Chicago soyoil prices due to concerns about the slow pace of Chinese purchases of U.S. soybeans.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 58 ringgit, or 1.4%, to 4,094 ringgit ($996.11) a metric ton at the close.

“Uncertainty over China bean buying keeps the pressure on soy complex, as with current loading, it is unlikely that China will meet their purchase targets by December as per the initial agreement with the U.S.,” said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading company.

Shipments of U.S. crops to China are accelerating after a tense tariff war stalled trade for months, with at least six bulk cargo vessels scheduled to load with soybeans at Gulf Coast terminals through mid-December, according to a shipping schedule seen by Reuters on Tuesday.

However, the slow pace of buying has raised fears that Beijing could fall well short of the U.S. cabinet members’ forecast of 12 million tons of soybean purchases by the end of this year, a target that Beijing has not confirmed.

Dalian’s most-active soyoil contract declined 0.41%, while its palm oil contract dropped 0.23%. Soyoil prices on the Chicago Board of Trade fell 0.66%.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Indonesia plans to require natural resource exporters to retain all foreign currency earnings in state-owned banks for at least a year and limit their use starting from January 1, finance ministry officials said on Monday.