Palm oil at a five-week low compared to weaker competitors

The price of Malaysian palm oils futures dropped for the third consecutive session on Tuesday, and reached their lowest level in five weeks. This was due to the weakness in edible oils from Dalian and Chicago, as well as a stronger Ringgit.

By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange had fallen 28 ringgit or 0.64% to 4,345 Ringgit ($1,028.65).

The contract reached 4,334 ringgit per ton earlier in the session, its lowest level since September 24.

A Kuala Lumpur trader stated that the crude palm oil price was in negative territory due to the continued weakness of Dalian palm olein.

Dalian's palm oil contract, which is the most active contract in Dalian, fell by 1.38%. Chicago Board of Trade soyoil fell 0.31%.

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

AmSpec Agri Malaysia, and Intertek Testing Services, cargo surveyors, reported that exports of palm oil products from Malaysia for the period October 1-25 had decreased between 0.3% to 0.4% compared with a previous month.

The dollar strengthened by 0.17% versus the ringgit. Palm oil becomes more expensive when the ringgit strengthens.

According to Wang Tao, technical analyst, palm oil will likely retest the support level of 4,346 Ringgit per ton. A break below this could lead to a drop to 4,308 Ringgit.

(source: Reuters)