Palm oil prices drop on Dalian pressure and demand concerns
Malaysian palm futures declined on Thursday due to a weaker Dalian vegetable oil and demand concerns amid a stronger ringgit.
By midday, the benchmark 'palm oil' contract for April delivery at the Bursa Derivatives exchange had fallen 27 ringgit or 0.64% to 4,198 ringgit (1,063.86) per metric tonne.
The stronger ringgit has not helped the market much. Demand is still a concern for now, particularly in the months ahead, said Paramalingam Supramaniam of Selangor brokerage Pelindung Bestari.
The Malaysian 'ringgit', the contract currency for trade, reached its highest level since April 2018, on January 28. It has also strengthened against the U.S. Dollar in recent months, making palms a bit more expensive for holders of foreign currencies. The ringgit dropped 0.41% to the dollar on Thursday.
Supramaniam said that the palm prices will be impacted by lower production in February due to a decrease in production.
Dalian's?palm-oil contract, which is the most active contract in Dalian, lost 1.09%. Chicago Board of Trade soyoil prices are up 0.09%.
As it competes for a piece of the global vegetable oil market, palm oil follows the price movement of other edible oils. A survey shows that Malaysia's palm oils inventories will?end a 10-month streak of rising prices in January as exports increased during a seasonally slowdown in production.
Technical analyst Wang Tao said that palm oil?looks neutral within a range between 4,201-42,254 ringgit/metric ton and an escape from this range could indicate a direction.
(source: Reuters)
