KUALA LUMPUR: Malaysian palm oil futures ended lower for the second consecutive session on Thursday, pressured by concerns over rising inventories and production, while weak export demand further weighed on the market.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange shed 26 ringgit, or 0.61%, to 4,241 ringgit ($1,002.60) a metric ton at the close.
Crude palm oil futures traded lower on ongoing concerns over rising output and stocks in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd. “The recent weak export demand is also seen as weighing down on market sentiment.”
Cargo surveyors estimated July palm oil exports to have fallen between 6.7% and 9.6%. The Malaysian Palm Oil Board is scheduled to release its supply and demand data on August 11. Dalian’s most-active soyoil contract rose 0.55%, while its palm oil contract shed 0.33%. Soyoil prices on the Chicago Board of Trade fell 0.52%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices steadied, paring early gains after the Kremlin announced that Russian President Vladimir Putin will meet US President Donald Trump in the coming days, raising expectations for a diplomatic end to the war in Ukraine. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Indonesian goods exported to the US will attract a 19% tariff from August 7, although the country is still negotiating exemptions for some of its key exports, such as crude palm oil.
The ringgit, palm’s currency of trade, weakened 0.07% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.