Palm oil ends lower following the release of MPOB data and rival oils' weakness

Malaysian palm oil prices fell after Tuesday's release of the key data by Malaysian Palm Oil Board (MPOB). Meanwhile, weakness in other edible oils on the Dalian and Chicago market also affected sentiment.

The benchmark palm oil contract on Bursa Derivatives Exchange for April delivery fell by 63 ringgit or 1.51% to 4,097 Ringgit ($1,044.89) per metric ton.

Data revealed that Malaysian palm oil stocks fell 7.72% in January, for the first time in 11 months. This was due to an increase in exports, despite production falling to a 10-month low.

AmSpec Agri Malaysia, an independent inspection company, reported on Tuesday that exports of palm oil products from Malaysia between February 1-10 dropped 14.3%, to 399.995 tonnes, compared with 466.457 tonnes in the period January 1-10.

Dalian's palm oil contract lost 0.69%, while the most active soyoil contract fell 0.3%. Prices of soyoil?on Chicago Board of Trade dropped by 0.64%.

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

Malaysia's oil palm plantations will grow to around 2 million hectares (4.94million acres) in 2027, up from their current level of 1.7 million. This will put pressure on the output from the second largest producer.

An official revealed on Tuesday that Indonesia's Estate -Crop Fund (BPDP), which is aimed at encouraging smallholders of palm oil to replant their crops and increase yields, has distributed 10.89 trillion rupiah (648.60 millions) so far. Analysts said that Indian demand for palm oil will rebound this year, as prices have dropped. However, competition from Chinese alternative oil soyoil is expected to 'cap' growth.

Analysts and palm oil traders predicted that China's palm oil demand would continue to decline in this year, as the country switches to canola or soybean oil alternatives.

(source: Reuters)