Palm oil prices fall amid rising Malaysian stocks

Malaysian palm oil futures fell more than 1% on September 10, extending losses for a third consecutive session. The November contract on Bursa Malaysia declined by 81 ringgit, or 1.63%, to 4,885 ringgit ($1,202.61) per ton.

Prices came under pressure from weaker soyoil and Malaysia’s palm oil supply and demand data. The country’s inventories reached an eight-month high in August as production rose to its highest level since December while exports declined.

Export activity remained weak in early September. Cargo surveyors estimated that Malaysian palm oil exports fell by 11.7–17.5% during September 1–10 compared with the same period in August. Higher production combined with weaker shipments is contributing to the buildup in stocks.

Rival vegetable oils also traded lower. Dalian’s most-active soyoil contract fell 0.64%, while its palm oil contract declined 1.37%. Chicago soyoil was down 0.55%. Palm oil tends to track movements in other vegetable oils as they compete for a share of the global market.

Meanwhile, higher crude oil prices provided some support to the market, as more expensive energy increases the attractiveness of palm oil as a biodiesel feedstock. The Malaysian ringgit also strengthened by 0.17% against the US dollar, making palm oil slightly more expensive for importers.

Tags: global market, prices, Malaysia, palm oil, futures