Palm prices fall as India rejects premium prices and funds drive the market
Malaysian palm futures declined on Friday, but were still on track to have their best week in over 16 months. India pulled back from purchasing due to a growing premium for soft oils. Fund positions are driving the current prices.
During the midday break, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for delivery in January fell 16 ringgit or 0.35% to 4,587 Ringgit per metric ton.
The contract is on track to achieve its largest weekly gain since June 2023.
A Mumbai-based trader at a global trading house stated that palm oil is currently selling at a premium to other soft oils. This has resulted in a reduction of Indian interest since the festive season's purchases are over.
The future price of crude palm oil is dominated by fund positions. The trader predicted that the market will experience some corrections once the short positions are reduced.
The cargo surveyors will release their estimates of Malaysian palm oil imports for the period Oct. 1-25 later in the day.
Dalian's palm oil contract, which is the most active contract in Dalian, rose 1.37% while soyoil contracts increased 1.54%. The Chicago Board of Trade soyoil price was down by 0.16%.
Palm oil follows the price movement of competing edible oils as they compete to gain a share on the global vegetable oil market. Oil prices were rising and on course for a weekly increase of more than 1 percent, as tensions grew in the Middle East - the top oil producing region in the world - and the upcoming restart of ceasefire talks with Gaza kept traders on edge.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm currency, the ringgit (0.03%) has weakened against the U.S. Dollar, making it cheaper for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could retrace to a range between 4,483 and 4,518 ringgit for metric tons after failing to break through major resistance at 4,658.
text_section_type="notes">For a table on Malaysian physical palm oil prices, including refined oil, Terminal users can double click on or type. Please enter the freight rate from Peninsula Malaysia/Sumatra, and then press Enter. Or, double-click between the brackets to view rates for China, India and Pakistan. Double-clicking on the codes between the brackets will allow terminal users to see the cash and futures prices of edible oils. To move to the next page, press F12. To go back, hit F11. Vegetable oils Malaysian Palm Oil Exports CBOT Soyoil Futures CBOT Soybean Futures Indian Solvent Dalian Commodity Exchange
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(source: Reuters)
