Palm oil prices fall to 11-week low on weak exports and rising output

Malaysian palm oil futures fell to an 11-week low on October 1, pressured by weaker exports, rising production and lower Chicago soyoil prices.

The December contract on the Bursa Malaysia Derivatives Exchange fell by 57 ringgit, or 1.24%, to 4,553 ringgit ($1,115.11) per ton. Additional pressure came from a 0.59% decline in CBOT soyoil futures.

Malaysian palm oil exports in September fell by 17.1–28.8% from the previous month, according to estimates from Intertek Testing Services and AmSpec Agri Malaysia. At the same time, production increased, while market participants expect inventories to exceed 3 mln tons.

Analysts expect palm oil prices to remain within a range of 4,500–5,000 ringgit per ton through the end of the year. High inventories are likely to weigh on the market, although an expected decline in production next year due to El Niño could limit further price losses.

Indonesia exported 16.13 mln tons of crude and refined palm oil in January-August, down 0.39% year-on-year. The country set its October crude palm oil reference price at $1,042.15/t.

Tags: prices, Malaysia, palm oil