Palm oil prices close at their lowest level since October, as weak competitors weigh
Malaysian palm oils futures continued to lose money on Wednesday due to the lacklustre performance of Dalian vegetable oil and expectations for improved production.
The benchmark July palm oil contract on Bursa Derivatives Exchange fell 36 ringgit or 0.89% to 4,007 Ringgit ($912.98) per metric ton, its lowest price since October 1.
A Kuala Lumpur trader stated that palm futures are tracking the spillover weakness of the external markets. He added that the expectation of seasonal output growth was also a pressure on the price.
The trader also said that the strong export data from April 1-15 lent support to this contract.
According to cargo surveyor Intertek Testing Services, and independent inspection company AmSpec Agri Malaysia, exports of Malaysian products containing palm oil for the period April 1-15 will increase between 13.6% and 17% compared to a month earlier.
Dalian's palm oil contract, which is the most active contract in Dalian, plunged by 1.08%. Chicago Board of Trade Soyoil Prices were Up 0.38%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
A circular posted on the website of the Malaysian Palm Oil Board on Tuesday showed that Malaysia had maintained its 10% export tax on crude palm oil for May and reduced its reference price.
Technical analyst Wang Tao stated that palm oil could bounce between 4,119-4176 ringgits per ton as it has stabilised around the support level of 4,026 ringgit.
(source: Reuters)
