Palm oil prices fall on rising production and stock concerns
Malaysian palm futures declined on Thursday, continuing losses from the previous day, amid concerns about rising inventories and production. Weak export demand also added to the pressure.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery fell 29 ringgit or 0.68% to 4,238 Ringgit ($1,003.08 a metric tonne).
David Ng said that the price of crude palm oil futures fell on concerns about rising production and stockpiles in the coming week. He is a proprietary trader with Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.
The recent weakness in export demand has also been seen to weigh down on the market sentiment.
According to cargo surveyors, the July palm oil exports fell between 6.7% and $9.7%.
On August 11, the Malaysian Palm Oil Board will release its data on supply and demand.
Dalian's palm oil contract, which is the most active contract, fell 0.42% while soyoil prices rose 0.36%. Chicago Board of Trade Soyoil Prices grew by 0.11%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
The oil price rose by 1% on Friday, ending a five-day decline, on the back of signs of stable demand in the U.S.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Indonesian goods export to the U.S. are subject to a tariff of 19% as of August 7. However, the country continues to negotiate exemptions for certain key products such as crude palm oils.
The dollar has strengthened by 0.05%, which makes palm slightly more expensive to buyers who hold foreign currencies. ($1 = 4.22250 ringgit). (Reporting and editing by Ashley Tang, Sumana Nady, and Eileen Soreng.)
(source: Reuters)
