KUALA LUMPUR: Malaysian palm oil futures extended losses for a third straight session on Wednesday as concerns over higher production and inventory levels continued to weigh on market sentiment.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange had slid by 33 ringgit, or 0.84%, to 3,910 ringgit ($906.77) a metric ton at closing, its lowest closing price since September 20 last year.
The weakness persists mainly due to concerns over production and the anticipation of higher stock levels in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
A Reuters poll estimated palm oil stocks likely rose for the first time in six months in March, while production surged 10.3% from the previous month.
Dalian’s most active soyoil contract rose 0.18%, while its palm oil contract shed 0.17%. Soyoil prices on the Chicago Board of Trade were down 0.43%.
Palm oil tracks the price movement of rival edible oils, as it competes for a share of the global vegetable oils market.
Palm oil closes lower on firmer ringgit, weaker rivals
Oil prices extended declines and were set for their largest monthly drop in almost three and a half years as the global trade war eroded the outlook for fuel demand, while concerns over mounting supply also weighed.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.3% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
Cargo surveyors estimated that April exports rose between 3.6% and 5.1%.
Indonesia lowered its crude palm oil reference price to $924.46 per ton for May, a trade regulation showed.
European Union soybean imports in the 2024/25 season that started in July had reached 11.46 million tons by April 27, up 8% from a year earlier, while palm oil imports were at 2.37 million tons, down 19%, data by the European Commission showed.