Palm oil exports and rival oils are weakening.

Malaysian palm futures declined?more? than 1% Thursday, falling from a 21-month high, on expectations of increasing September inventories, slowing exports and weakness in rival vegetable oils.

At the close, the benchmark contract for?palm?oil delivery in December on the Bursa Derivatives exchange was down 58 Ringgit or 1.16% at $4,940 Ringgit ($1,206.05). The contract had reached its highest level since December 2024 earlier in the day.

As it competes to gain a share of global vegetable oil?market, palm oil is closely tracking?rival edible oils.

Dalian's palm oil contract, which is the most active contract in Dalian, lost 1.06% while soyoil prices fell by 0.34%. Prices for soyoil on the Chicago Board of Trade fell by 1.02%.

"Palm Oil Fundamentals Remain Weakened by Weak?September Exports and Expectations that End-Month Stocks Could Rise to Around?3 Million Tons," said a director of Selangor-based brokerage Pelindung Bestari,?Paramalingam Supramaniam.

He added that the market was influenced by speculation that India could reduce import duties on vegetable oil and that Indonesia might increase its biodiesel blend mandate.

Exports of Malaysian Palm Oil Products for the period?September 1-15 were estimated to have fallen between 17.8% and 25,6% from one month earlier.

The 'fourth quarter' could see a drop of up to 15% in palm oil production in the main producing region in Indonesia,?Kalimantan. This is due to the prolonged dry weather conditions and the widespread fires that have affected the plantations.

The palm ringgit's trade currency, the US dollar, fell by 0.33%, making the commodity more affordable for buyers with foreign currencies.

Reports of additional Saudi crude cargoes passing through 'Oman eased concerns about supply, but prices remained above $100 per barrel due to fears that the Middle East conflict may worsen.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

(source: Reuters)