Export data and concerns about higher Indian duties are cited as reasons for the decline in palm oil.
Malaysian palm futures fell on Monday as the market was pressured by lower estimates of palm oil exports in the first two week's of February, and India raising import taxes for vegetable oils.
At the midday break, the benchmark palm oil contract on Bursa Derivatives exchange for May delivery fell 14 ringgit (0.31%) to 4,485 Ringgit ($1,013.10) per metric ton. The contract increased by 0.83% during the previous session.
Anilkumar bagani, head of commodity research at Mumbai's Sunvin Group, explained that the price of crude palm oil futures was lower because soyoil markets were weaker and Malaysian palm oils export performance in the first half February had been poorer.
He said that the possibility of India increasing import duties on vegetable oil is also creating uncertainty in the markets where it was produced.
Dalian's soyoil contract, which is the most active contract, fell by 1.11% while palm oil rose by 0.13%. Chicago Board of Trade will be closed on a public holiday.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
The oil price fell for the fourth consecutive day, on hopes that a Russia-Ukraine agreement would ease sanctions disrupting supplies and on fears that tariff wars around the world could slow down economic growth and weaken demand.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The cargo surveyors estimate that Malaysian palm oil exported fell between 12.3% to 19.9% from February 1-15 compared with a month ago.
The palm ringgit's trade currency strengthened by 0.11% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could retest its support at 4,540 Ringgit per metric tonne. A break below this level would open the door to the range of 4,437 to 4,488 Ringgit.
(source: Reuters)
