Palm oil prices fell amid concerns about weak export demand in the coming weeks

According to David Ng, a Kuala Lumpur-based trader at Iceberg X, crude palm oil prices have declined amid concerns about weak export demand in the coming weeks. However, Ng believes that in the short term, prices will likely be supported by escalating tensions in the Middle East. He forecasts palm oil prices to strengthen above 4,100 ringgit per tonne, with resistance at 4,250 ringgit per tonne.

Malaysian palm oil futures fell on Wednesday after three consecutive sessions of gains, pressured by lower Chicago soybean oil prices and profit-taking.

The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange lost 8 ringgit, or 0.19%, to 4,178 ringgit (US$1,059.87) per metric tonne at the close.

“Today’s palm oil futures are following the decline in Dalian and Chicago soybean oil prices, taking profits after the recent rally, and are expected to trade in the 4,150-4,300 ringgit per tonne range based on current oil prices,” said a Kuala Lumpur-based trader.

The most-active Dalian soybean oil contract rose 0.46%, while the FCPO1 palm oil contract rose 0.22% after falling 0.49% earlier in the session. The price of soybean oil on the Chicago Mercantile Exchange fell 0.27%.

Palm oil prices are tracking the price of competing edible oils as it fights for share in the global vegetable oil market.

Malaysia’s palm oil inventories likely fell for the second month in a row in February, reaching a four-month low, as a seasonal decline in production outweighed a slowdown in exports, a Reuters poll showed.

India’s palm oil imports rose 10.1% in February, reaching a six-month high, as a widening discount to competing oils prompted refiners to increase purchases and reduce sunflower oil imports, according to five oil dealers.

Oil prices rose 3% on Wednesday.

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

Tags: prices, palm oil