Palm oil falls to 11-week low on weak exports, rising output
- Soyoil prices on the Chicago Board of Trade were down 0.59%
JAKARTA: Malaysian palm oil futures closed at their lowest in 11 weeks on Thursday, pressured by weakness in Chicago soyoil prices and concerns over softer September exports and rising production.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange lost 57 ringgit, or 1.24%, to 4,553 ringgit ($1,115.11) a metric ton at the close.
“Although external markets were supportive, local sentiment remained bearish as production rose sharply, exports slowed and inventories were expected to exceed 3 million tonnes,” a Kuala Lumpur-based trader said.
Soyoil prices on the Chicago Board of Trade were down 0.59%. Chinese markets are closed from October 1 to 7 for holidays.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Malaysian palm oil prices are likely to remain between 4,500 and 5,000 ringgit a metric ton through December, as higher stocks weigh on prices despite expectations of lower production next year due to El Niño, a top analyst said on Thursday.
Exports of Malaysian palm oil products for September fell between 17.1% and 28.8% from a month earlier, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said on Wednesday.
Meanwhile, Indonesia exported 16.13 million metric tons of crude and refined palm oil in the January to August period, down 0.39% from the same period a year earlier, statistics bureau data showed on Thursday.
Indonesia has set its October crude palm oil reference price at $1,042.15 per ton, a trade ministry regulation showed on Wednesday.
Oil prices rose around 2% on Thursday after China suspended oil products exports, potentially tightening fuel markets already coping with supply shortages globally, while investors continued to assess renewed diplomatic efforts to end the US-Iran war.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit palm’s currency of trade, weakened 0.2% against the dollar, making the commodity cheaper for buyers holding foreign currencies.