JAKARTA: Malaysian palm oil futures fell more than 1percent on Thursday, retreating from a 21-month high on expectations of rising September inventories, sluggish exports and weakness in rival vegetable oils.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 58 ringgit, or 1.16percent, at 4,940 ringgit (USD1,206.05) a metric ton at the close. Earlier in the day the contract hit its highest since December 2024.
Palm oil tracks rival edible oils as it competes for a share of the global vegetable oils market.
Dalian’s most-active soyoil contract fell 0.34percent, while its palm oil contract lost 1.06percent. Soyoil prices on the Chicago Board of Trade were down 1.02percent. “Palm oil fundamentals remain weighed down by weak September exports and expectations that end-month stocks could rise to around 3 million tons,” said Paramalingam Supra maniam, a director at Selangor-based brokerage Pelindung Bestari.
The market drew some support from speculation that India may cut import duties on vegetable oils and that Indonesia could raise its biodiesel blending mandate, he added. Cargo surveyors estimated that exports of Malaysian palm oil products for September 1-15 fell between 17.8percent and 25.6percent from a month earlier. Palm oil output in the major producing region of Kalimantan in Indonesia could fall by 12percent to 15percent in the fourth quarter, with plantations hit by prolonged dry weather and widespread fires.