Palm oil futures fall on Thursday amid profit-taking

Malaysian palm oil futures closed lower on August 6 after posting gains in the previous two sessions. The benchmark October contract on the Bursa Malaysia Derivatives Exchange fell 17 ringgit, or 0.36%, to 4,685 ringgit per ton ($1,146.3/t) as traders took profits ahead of key production and export data.

Market participants are awaiting August export figures, along with reports from the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Association (MPOA), which are expected to provide fresh signals on the supply and demand balance. The MPOB report is scheduled for release on August 10.

Crude oil prices continued to support the market. Concerns over potential supply disruptions linked to tensions around the Strait of Hormuz, as well as reports of attacks on tankers in the Red Sea and the Gulf of Aden, kept oil prices elevated. Higher crude oil prices improve the competitiveness of palm oil as a biodiesel feedstock.

Other vegetable oil markets showed mixed performance. The most-active soyoil contract on the Dalian Commodity Exchange gained 0.29%, while the benchmark palm oil contract rose 0.35%. Meanwhile, soyoil futures on the Chicago Board of Trade edged down 0.04%.

A slightly stronger Malaysian ringgit also weighed on prices by making palm oil more expensive for buyers using foreign currencies. Market direction in the coming days will largely depend on official data on Malaysia’s palm oil production, inventories, and exports.

Tags: prices, palm oil