Palm oil suffers heavy losses in Dalian competitors oils
The prices of vegetable oils rivals in Dalian have been falling heavily, which has led to a fall in the palm oil futures in Malaysia for a second consecutive session.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery had fallen 114 ringgit or 2.27% to 4,912 Ringgit ($1,103.57).
Prices have dropped sharply below the 5,000-ringgit mark, which is exacerbated due to weakness in the Chinese vegetable oil market. This indicates a consolidation after the recent bull market from Sept. 18 through Nov. 11, said Darren Lim at Singapore-based Phillip Nova.
Dalian's palm oil contract fell 4.71%, while the most active soyoil contract dropped 4.67%. Chicago Board of Trade soyoil prices were down by 1.36%.
As palm oil competes to gain a share of the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Analysts said that Chicago soybean futures plunged sharply on Tuesday, as traders feared Donald Trump's nominee to head the U.S. Environmental Protection Agency (EPA) would have a less than friendly view of the biofuels industry.
According to AmSpec Agri Malaysia (ITS) and AmSpec Agri Malaysia (AmSpec), the exports of palm oil products from Malaysia in the period Nov. 1-10 have fallen between 14.6% to 15.8% compared to the same period a year ago.
Malaysia's palm-oil inventory fell the most in seven month in October, as exports surged and production dropped, while domestic consumption increased. This was revealed by the industry regulator on Monday.
Oil prices rose on the day, on signs of tightening supply in the near term. However, they remained at their lowest level in two weeks. This was a day after OPEC revised its forecasts 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 oil could break through support at 5,017 Ringgit and drop into the range of 4,882-42,947. According to Wang Tao, a market analyst for commodities & energy technicals, the current correction will consist of three waves.
(source: Reuters)
