Palm oil futures in Malaysia fell by more than 3% yesterday

October futures for palm oil on the Bursa Malaysia after a decline last week by 0.63% yesterday fell another 3.29% to a 6-month low of 3788 ringgit/t or 857,01 $/t amid strengthening of the ringgit and falling crude oil prices. The fall was exacerbated by yesterday’s collapse of global stock markets, which negatively affected commodity prices.

Traders believe that the decline in crude oil prices caused by a possible recession in the United States could reduce demand for palm oil, which is used in the production of biofuels. However, the news of a slowdown in the US economy was offset by information about the escalation in the Middle East, the world’s main oil production region.

Brent crude oil futures fell 1.9% to $75.35 per barrel, which could soon lead to a decrease in demand for palm oil. And the strengthening of the ringgit against the dollar by 1.67% makes palm oil less interesting for importers.

On the Dalian exchange, the most active contract for soybean oil fell by 0.39% yesterday, and for palm oil – by 0.23%, while prices for soybean oil on the Chicago Board of Trade fell by 1.47%.

Overall, September soybean oil futures in Chicago fell another 5.6% over the week to the lowest level since the end of 2020 at 903 $/t (-18.8% for the month).

Palm oil prices are highly dependent on the prices of other edible oils that compete with each other in the global vegetable oil market.

It is expected that after three months of growth, palm oil stocks in Malaysia in July will decrease (compared to the end of June) by 1.17% to 1.8 million tons, – reports Reuters. At the same time, the production of palm oil increased by 12.7% to 1.82 million tons, and exports of palm oil products – by 26.1% to 1.52 million tons.

the Decline in prices for palm and soybean oil increases the pressure on the price of sunflower oil, which do not change, despite the shortage of supply at the end of the season.

Tags: soybean oil, prices, palm oil