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, reaching its lowest close in almost 12 weeks. This was due to the weakness of rival edible oils from Dalian and Chicago, as well as a stronger Ringgit.

The benchmark contract for palm oil delivery in January on the Bursa Derivatives exchange lost 58 Ringgit or 1.33% to close at 4,315 Ringgit ($1,021.54) per metric ton.

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

Indonesia's

Palm oil production

GAPKI, the Indonesian palm oil association, said that production could reach 56 million metric tonnes, higher than previously projected, as a result of favorable weather conditions and high prices.

Dalian's palm oil contract, which is the most active contract in Dalian, fell by 1.67%. Chicago Board of Trade soyoil lost 0.37%.

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

The dollar strengthened by 0.24% in relation to the ringgit. Palm oil becomes more expensive when the ringgit strengthens.

Oil prices dropped 2% on Monday, their third consecutive day of declines as investors assessed the impact of U.S. sanction on Russia's largest oil companies, along with a possible OPEC+ production plan.

Palm oil became less desirable as a feedstock for biodiesel due to a weaker crude.

(source: Reuters)