Palm prices fall for the third consecutive session due to poor demand in key markets

The price of palm oil in Malaysia fell for the third consecutive session on Tuesday due to weak demand from major destination markets.

At the close, the benchmark contract of Bursa Malaysia's Derivatives exchange fell 34 ringgit (0.71%) to 4,724 Ringgit ($1,058.01) per metric ton.

Anilkumar bagani, the commodity research director at Mumbai-based Sunvin Group, stated that futures were under pressure due to lower overnight Chicago Soyoil Futures and lack fresh demand from destinations markets, amid deep negative margins in imports, particularly in India.

Paramalingam Supramaniam is the director of Selangor brokerage firm Pelindung Bestari. He said that prices plummeted following a massive liquidation by funds. This trend, it's believed, will continue over a long period.

The market will remain under pressure until we see a return of genuine buying interest on the cash market. This is due to the bumper crop in America and the book closing for year-end.

He said that fundamentals like weaker production, and the possibility that end stocks could fall below 1.5 million metric tonnes by February, did not ease market sentiment.

Dalian's palm oil contract, which is the most active contract, fell 1.2% while soyoil prices dropped 0.23%. Chicago Board of Trade soyoil prices were up by 0.07%.

As they compete to gain a share of the global vegetable oil market, palm oil monitors price changes in rival edible oils.

The palm ringgit's trade currency, the dollar, fell by 0.34%, making the commodity more affordable for buyers who hold foreign currencies.

The oil prices fell as China's economic figures rekindled demand concerns. Investors remained cautious in anticipation of the U.S. Federal Reserve interest rate announcement. ($1 = 4.4665 ringgit) Reporting by Ashley Tang, Editing by Mrigank H K, Varun HK and Tasim Zaid

(source: Reuters)