SINGAPORE: Malaysian palm oil futures fell for the second consecutive session on Tuesday, weighed down by concerns over easing demand and rising supply.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell 58 ringgit, or 1.6%, to 3,679 ringgit ($772.17) a metric ton in morning trade.
The contract is down 2.4% so far this month, and is heading for its second consecutive monthly loss.
Malaysian palm exports have rebounded and are projected to increase in the near future, according to Sathia Varqa, senior analyst with Fastmarkets Palm Oil Analytics.
Expectation of greater output are outweighing rise in exports, resulting in higher end-of-month stock levels.
Large losses on the Dalian amid China’s economic woes are also weighing on palm futures, Sathia added.
Palm oil closes lower on strong ringgit, supply-demand data in focus
China’s manufacturing activity unexpectedly returned to contraction in October, an official factory survey showed on Tuesday.
Dalian’s most-active soyoil contract fell 1.5%, while its palm oil contract was down 2.9%.
The US soybean harvest continued to progress ahead of the average pace despite rains in the last week.
A quick harvest pace is likely to boost supplies of the oilseed and its products, including soyoil.
Soyoil prices on the Chicago Board of Trade fell 0.2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.1% against the US dollar.
A stronger ringgit makes palm oil less attractive for foreign currency holders.
Meanwhile, Indonesia’s August palm oil exports eased 55% on year to 2.07 million metric tons, association GAPKI said on Friday.