Palm slips due to poor demand in India
The price of Malaysian palm oil futures fell on Monday due to weak demand in India, a key destination market.
At the close, the benchmark March palm oil contract on Bursa Derivatives Exchange fell 26 ringgit (0.6%), to 4,342 Ringgit ($963.18) 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 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 discounts.
Dalian's soyoil contract with the highest volume fell by 1.43% while palm oil contracts gained 0.02%. Chicago Board of Trade soyoil prices rose 1.45%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The dollar strengthened, which pushed oil prices down. However, they remained their highest level since mid-October, as the colder weather encouraged buyers. Expectations of tighter sanctions against Iranian and Russian oil exports also boosted purchases.
The palm ringgit's trade currency has weakened by 0.24% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies. ($1 = 4.5080 ringgit)
(source: Reuters)
