Palm oil prices fall on Dalian weakness

Malaysian palm oils futures ended lower on Wednesday for the third consecutive session, following the weakness of rival Dalian edible oil.

The benchmark contract for palm oil delivery in January on the Bursa Derivatives exchange lost 51 ringgit or 1.13% to 4,454 Ringgit ($1,054.45) per metric ton.

A Kuala Lumpur based trader stated that "today, futures track Dalian weakness and are waiting for new leads" to move the markets.

Dalian's palm oil contract, which is the most active contract, lost 1.69% while soyoil contracts in Dalian fell 0.99%. Chicago Board of Trade soyoil prices were up 0.3%.

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

Energy Minister Bahlil lahadalia reported that Indonesian biodiesel consumption for the period January-September was 10.57 million kilograms. This is an increase of nearly 10% compared to 9.61 million kilograms a year ago.

Intertek Testing Services, a cargo surveyor, reported that exports of palm oil products from Malaysia for the period October 1-20 were up 3.4% compared to a month ago. AmSpec Agri Malaysia is an independent inspection company and said that they had increased by 2.5%.

In the face of uncertain palm and soy oil exports, the Malaysian Palm Oil Council stated on Tuesday that crude palm oil prices will remain above 4,400 Ringgit ($1,042) a ton in 2026.

The price of oil rose for the second consecutive day on Wednesday. It increased by about 2%. This was boosted by the hopes that a U.S.-China and India trade agreement would be completed.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The dollar, the currency used by palm to trade in, has weakened by 0.05%. The commodity becomes cheaper for foreign currency buyers when the ringgit is weaker. ($1 = 4.22240 ringgit). (Reporting and editing by Subhranshu sahu, Shakesh Kuber and Dewi Kurniawati)

(source: Reuters)