Palm extends its loss due to rival oil weakness
The price of Malaysian palm oils futures continued to fall on Tuesday. This was due to the weakness in other oils, but strong export data helped limit losses.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery fell 38 ringgit or 0.88% to 4,275 Ringgit ($993.26) per metric ton.
David Ng said that the market was being impacted by the overnight decline in Chicago soyoil prices and the lower Dalian palm olein, a proprietary trading at Kuala Lumpur based trading firm Iceberg X Sdn Bhd.
He said that the exports have been strong so far, which has kept losses to a minimum.
AmSpec Agri Malaysia, and Intertek Testing Services estimate that exports of Malaysian Palm Oil Products rose between 0.8% and 1.1 % in September, while they were expected to rise between 13.6% and 18 9% between Oct. 1-10 compared to a month earlier.
Later in the day, cargo surveyors will release estimates of Malaysian palm oil imports for Oct. 1- 15.
Dalian's palm oil contract, which is the most active contract in Dalian, fell by 1.21%. Chicago Board of Trade soyoil prices were down by 0.43%.
As they compete to gain a share in the global vegetable oil market, palm oil monitors prices of competing edible oils.
Early Asian trade saw oil prices fall 3% after a report in the media said that Israel was willing to not strike Iranian oil targets. This eased concerns about a disruption in supply, and also after OPEC lowered their outlook for growth in global oil demand in 2024-2025.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Palm's currency, the ringgit (the palm-traded currency), fell 0.3% in value against the U.S. Dollar, making the commodity more affordable for buyers with foreign currencies.
Wang Tao, a technical analyst, said that palm oil could fall to 4,206 Ringgit per metric tonne, after it failed to break through resistance at 4,406 Ringgit. ($1 = 4.3040 ringgit)
(source: Reuters)
