Palm oil stabilizes on Thursday after four-day slide

Malaysian palm oil futures ended nearly flat on September 24 after declining for four consecutive sessions. The December contract on Bursa Malaysia gained 3 ringgit, or 0.06%, to 4,771 ringgit ($1,168.22)/t after falling 3.4% over the previous four trading days.

The market was supported by firmer vegetable oil futures in Dalian. The most-active soyoil contract rose 0.39%, while palm oil gained 0.68%. Chicago soyoil futures, meanwhile, slipped 0.03%.

Crude oil price movements continue to influence market sentiment, as higher oil prices improve palm oil’s attractiveness as a biodiesel feedstock. A 0.17% weakening of the Malaysian ringgit against the dollar also slightly improved palm oil’s export competitiveness.

However, fundamental pressure remains due to expectations of rising palm oil inventories in Malaysia and sluggish demand from India, the world’s largest importer. Market participants also noted that the potential impact of El Niño on production has yet to emerge.

Another factor for the market was India’s decision to cut the basic import duty on crude and refined edible oils, including palm, soyoil and sunflower oil. The government aims to curb domestic prices ahead of the peak festive season.

Tags: prices, Malaysia, palm oil