Palm oil continues to decline on concerns about weak demand

Malaysian palm futures declined for the second session in a row on Thursday as weak demand pushed prices down.

At midday, the benchmark contract for palm oil delivery in March on the Bursa Derivatives exchange fell 85 ringgit or 1.95% to 4,269 Ringgit ($949.51) per metric ton.

The contract fell 0.25% Wednesday.

Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that traders are waiting for signs of recovery in the market after recent turmoil. However, demand continues to be weak, and this puts pressure on prices.

The extent of the restrictions is still not clear.

The government announced on Wednesday that Indonesia has reduced exports of palm oil residue and used cooking oil to ensure supply for domestic cooking oil industries and biodiesel.

The Malaysia Palm Oil Board and cargo surveyors will both release their December supply-demand statistics on Friday.

Dalian's palm oil contract, which is the most active contract in Dalian, fell by 2.79%. Chicago Board of Trade soyoil prices were down by 1.15%.

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 second day in a row after huge increases in fuel stocks in the top consumer, America. However, expectations of increased winter fuel demand, and supply concerns, limited losses.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

The palm ringgit's trade currency strengthened by 0.09% against dollars, increasing the price of the commodity for holders of foreign currencies.

Technical analyst Wang Tao stated that palm oil is neutral between 4,313 and 4,423 ringgits per metric ton. An escape from this range could indicate a direction.

(source: Reuters)