Palm oil demand in India is low
Malaysian palm futures declined on Monday due to a sluggish Indian demand, which is a key destination.
At the midday break, the benchmark March palm oil contract on the Bursa Derivatives exchange in Malaysia shed 30 ringgit or 0.69% to 4,338 Ringgit ($961.86) per metric ton. The contract increased by 0.81% during the previous session.
A Kuala Lumpur based trader stated that the weakness in the palm market at midday was due to concerns about exports.
According to Intertek Testing Services, a cargo surveyor and AmSpec Agri Malaysia, an independent inspection company, exports of palm oil products from Malaysia for December decreased between 2.5% and 8.8%.
Five dealers reported last Friday that India's palm oils imports plunged in December to the lowest level in nine months, as a rise in prices to an all-time high of 2-1/2 years prompted refiners and buyers to purchase more soyoil substitutes at a discounted price.
Dalian's soyoil contract with the highest volume fell by 1.17% while palm oil contracts increased by 0.99%. Chicago Board of Trade soyoil prices rose 0.28%.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
Investors were watching the effect of colder weather on the Northern Hemisphere, and Beijing's stimulus measures.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, fell by 0.29%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could test the resistance zone between 4,423 and 4,460 ringgit for a metric ton. It has stabilised around its key support of 4,263 ringsgit.
(source: Reuters)
