Malaysian palm oil slips
Malaysian palm oil futures fell for a second session in a row on Wednesday, dragged down by the heavy losses in prices of rival vegetable oils in Dalian.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 114 ringgit, or 2.27%, to 4,912 ringgit ($1,103.57) a metric ton by the midday break. “Prices have sharply declined below the 5,000 ringgit level, exacerbated by weakness in the Chinese-related vegetable oils market.
This suggests a consolidation following the recent bull run from Sept. 18 to Nov. 11,” said Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova. Dalian’s most-active soyoil contract plunged 4.67%, while its palm oil contract tumbled 4.71%.
Soyoil prices on the Chicago Board of Trade were down 1.36%. Palm oil tracks the price movements of rival edible oils as it competes for a share in the global vegetable oils market.
Chicago soybean futures took a sharp dive on Tuesday as traders worried that US President-elect Donald Trump’s nominee for the head of the US Environmental Protection Agency would take a less-than-friendly view of the biofuel industry.
Exports of Malaysian palm oil products in the Nov. 1-10 period are estimated to have dropped between 14.6% and 15.8% from the same period a month ago, according to surveyors AmSpec Agri Malaysia and Intertek Testing Services (ITS).
Malaysia’s palm oil inventory shrank the most in seven months in October as exports surged, production fell and domestic consumption increased, the country’s industry regulator said on Monday.
Oil prices edged up on the day on signs of near-term supply tightness but remained near their lowest in two weeks, a day after OPEC downgraded its forecast for global oil demand growth in 2024 and 2025.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. Palm oil may break support at 5,017 ringgit and fall into the 4,882-4,947 range.
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