Malaysian palm oil futures fell on Wednesday, largely because of weak demand from major importer China. The benchmark palm oil contract for March on the Bursa Malaysia Derivatives Exchange rose slightly before ending the day 0.2 percent lower at 2,448 ringgit ($557.76) per tonne. Palm has been falling since the new year and dropped to 2,418 ringgit, its lowest point since December 21, in early trading on Wednesday.
One Kuala Lumpur broker blamed the dip on concern over China's slowing economy. Chinese stock markets tumbled 7 percent in their opening session on Monday, driven by weak factory activity surveys and a depreciating yuan. December's palm exports from Malaysia, the world's second-biggest producer of palm oil by volume, fell 5-6 percent compared to the month before.
But another trader said market sentiment remained uncertain as traders weighed slowing Chinese demand against an expected fall in palm production and the ringgit weakening 1.1 percent to 4.3890 against the dollar on Wednesday. Palm oil's traded volume stood at 35,812 lots of 25 tonnes each at the market's close. Palm oil is expected to fall to 2,392 ringgit per tonne, as it has cleared a support at 2,434 ringgit, said Reuters market analyst for commodities Wang Tao. In competing vegetable oil markets, the US March soyoil contract fell 0.2 percent while the May soybean oil contract on the Dalian Commodity Exchange lost 0.9 percent.
Comments
Comments are closed for this article.