KUALA LUMPUR: Malaysian palm oil futures slid more than 1 percent on Thursday to a nearly three-week low, extending losses for a fourth straight session, as weaker rival edible oils and worries over rising October inventories weighed.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 69 ringgit, or 1.47 percent, to 4,616 ringgit (USD1,131.32) a metric ton, the lowest closing price since October 9.
The market traded sharply lower following the drastic drop in rival oilseeds amid the absence of any announcement on the removal of Malaysia’s crude palm oil export tax, a Kuala Lumpur-based trader said.
“Market participants remain cautious also amid concerns over potentially higher palm oil end-stocks in October, as indicated by rising production in the near term,” the trader added.
Dalian’s most-active soyoil contract slipped 0.71 percent, while its palm oil contract shed 2.38 percent. Soyoil prices on the Chicago Board of Trade were down 1.46 percent. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell, paring gains made a day earlier, as hopes for peace talks took the edge off renewed concerns over Middle East supply disruptions from escalating regional conflict.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.42 percent against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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