Palm falls on poor demand from India

Malaysian palm oil futures fell on Monday, weighed down by sluggish demand from key destination market, India.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange shed RM30, or 0.69 per cent, to RM4,338 (US$961.86) a metric ton at the midday break. The contract rose 0.81 per cent in the previous session.

“At the midday break, the weakness seen in the palm market is due to export concerns,” a Kuala Lumpur-based trader said.

Exports of Malaysian palm oil products for December fell between 2.5 per cent and 7.8 per cent, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.

India’s palm oil imports in December plunged to their lowest in nine months as a rally in prices to a 2-1/2-year high prompted refiners to increase purchases of substitute soyoil that was available at a discount, five dealers said last Friday.

Dalian’s most-active soyoil contract fell 1.17 per cent, while its palm oil contract added 0.99 per cent. Soyoil prices on the Chicago Board of Trade climbed 0.28 per cent.

Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.

Oil prices hovered at their highest levels since October as investors eyed the impact on global fuel demand from colder weather in the Northern Hemisphere and Beijing’s economic stimulus measures.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.29 per cent against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Tags: Malaysia, palm oil, imports, futures, Market, benchmark contract