Palm oil falls for third session on weaker Dalian rivals

JAKARTA: Malaysian palm oil futures fell for a third straight session to their lowest in eight weeks on Tuesday, as weakness in rival Dalian vegetable oils and market expectations of rising inventory in September weighed.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 35 ringgit, or 0.75%, at 4,629 ringgit ($1,134.56) a metric ton by the midday break.

A Kuala Lumpur-based trader noted “bearish market sentiment on expectations of high endstocks due to high production with lower export figures for September.”

Exports of Malaysian palm oil products for September 1-25 likely fell between 15.1% and 24.3% from a month earlier, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said.

Malaysian palm oil inventory in August-end had climbed to the highest level in eight months. Dalian’s most-active soyoil contract fell 0.23%, while its palm oil contract shed 1.04%.

Soyoil prices on the Chicago Board of Trade were up 0.72%.

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

Oil prices rose for a second successive session as lingering concern over Middle East supply disruption brought about by the US-Iran conflict outweighed signs of recovering crude exports from the region.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Palm oil still targets a range of 4,588 ringgit to 4,622 ringgit per ton, as suggested by a projection analysis, Reuters technical analyst Wang Tao said.

Indonesia’s palm oil exports in July stood at 3.19 million tons, down 9.87% from a year earlier, palm oil association GAPKI said.