Malaysian palm oil falls to more than five-week low
Malaysian palm oil futures fell to their lowest level in more than five weeks on Tuesday amid expectations of rising stocks and weak demand. The December contract on Bursa Malaysia declined 0.97% to 4,810 ringgit/t, or around $1,181/t.
Prices are under pressure from expectations that Malaysia’s ending palm oil stocks could exceed 3 mln tons and approach record levels. At the same time, spot availability remains high while demand is subdued.
Exports of Malaysian palm oil products in the first 20 days of September were estimated to have fallen by 12.8–24.7% from the previous month, adding further pressure to the market.
Weaker crude oil prices are also reducing support from the biofuel sector. Lower oil prices make palm oil less attractive as a feedstock for biodiesel production.
However, the Malaysian Palm Oil Council expects crude palm oil prices to remain above $1,154/t in October and through the end of the year, supported by weather risks and energy market conditions.
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