Palm extends its losses due to concerns about rising stocks and weaker competitors oils

Malaysian palm oils futures fell on Tuesday, for the?third session in a row. They were pressured by lower rival oils as well as?concerns about rising stocks due to a drop in exports.

At midday, the benchmark palm 'oil 'contract for March delivery at Bursa Malaysia derivatives Exchange fell 27 ringgit or 0.67% to $3,986 Ringgit ($976.96).

Anilkumar bagani, the commodity research director at Sunvin Group in Mumbai, said that crude palm oil futures had been trading lower due to overall weakness on global vegetable oil markets.

Bagani said that the persistently lower Malaysian palm-oil export performance raises the risk of an?further rise in palm-oil stocks', and the stronger ringgit adds to the market pressure.

Dalian's most-active palm oil contract dropped 1.15%, while the soyoil contract that was most active fell 0.93%. Prices of soyoil on the Chicago Board of Trade fell by 0.61%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

Exports of palm oil-based products from Malaysia for the period December 1-15 were estimated to have fallen between 15.9% and 164% compared to a month ago.

The palm ringgit's currency has strengthened by 0.22% versus the dollar. This makes the commodity more expensive to buyers who hold foreign currencies.

The oil prices dropped, adding to the previous session's losses as prospects of a Russia-Ukraine deal seemed to be strengthening, causing expectations of an easing of sanctions.

Weaker crude futures make palm a less appealing option as a biodiesel feedstock.

The Solvent Extractors' Association of India reported that India's palm-oil imports increased in November as refiners took the opportunity to purchase the oil at lower prices. They also reduced imports of more expensive soyoil, sunflower oil and other tropical oils.

(source: Reuters)