VEGOILS-Palm trades lower after Malaysian palm oil data
The price of Malaysian palm futures dropped on Tuesday, after the data released by the industry regulator confirmed that market expectations were correct. This was due to a decline in Malaysian stocks, production and exports.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for February delivery had fallen 82 ringgit (1.6%) to 5,038 Ringgit ($1,138.27).
Malaysian palm oil stocks fell for the second consecutive month, dropping 2.6% from November to 1,84 million tons. This is according to data released by the Malaysian Palm Oil Board.
The MPOB reported that the production of crude palm oil fell 9.8% to 1,62 million tonnes in November, while exports plummeted 14.7% to 1,49 million tonnes.
The MPOB's end-stocks data and exports figures were in line with the findings of most analysts, so there was no surprise, said Paramalingam Supramaniam at Selangor brokerage Pelindung Bestari.
The focus of the future will be on production patterns for December and the first quarter of 2025 and the impact that recent rains and floods had on the output.
After heavy rains late in November, a flood hit Malaysia last week. The country's weather department has forecast a monsoon rush from Dec. 8-14 that could bring continual rainfall to parts of Sabah and Sarawak and Peninsular Malaysia on Borneo Island.
Sabah and Sarawak produce the most palm oil in Malaysia.
Dalian's palm-oil contract dropped 0.31% while its most active soybean oil contract grew 0.36%. Chicago Board of Trade soyoil fell by 0.79%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
Oil prices fell as concerns about the aftermath of the overthrow of Syrian President Bashar Al-Assad eased. However, the market found support from China's pledge to increase policy stimulus which could boost demand for the top global crude purchaser.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
Technical analyst Wang Tao stated that palm oil could test support at 5,067 Ringgit per metric tonne, with a high probability of breaking through this level to fall towards 4,983 Ringgit. ($1 = 4.4260 ringgit)
(source: Reuters)
