Palm oil prices fall on the back of profit-taking, but production worries limit losses
Malaysian palm futures fell on Monday due to profit-taking. However, concerns about a possible drop in production supported the prices.
At midday, the benchmark palm oil contract on Bursa Derivatives exchange for December delivery fell 32 ringgit (0.72%) to 4,410 Ringgit ($1,047.01) per metric ton. The price ended Friday at 4,442 Ringgit, a 0.09% decrease.
Anilkumar bagani, the head of research for Mumbai-based Sunvin Group, said that crude palm oil futures fell due to profit-taking, amid market speculation about a possible increase in import duties by India on vegetable oils.
Bagani said that there are concerns about the lower than expected reduction in Malaysian Palm Oil production.
On October 10, the Malaysian palm oil Board (MPOB), is expected to release their September supply and demand data.
Oil prices increased by about 1.5%, as OPEC+ announced a modester monthly production increase than anticipated, easing some supply concerns. Analysts expect that near-term gains will be capped due to a weak demand outlook.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The Chicago Board of Trade Soyoil Price (CBOT), which is the largest exchange in the United States, increased by 0.6%. Dalian Commodity Exchange will be closed on October 1-8 due to public holidays.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The dollar has weakened by 0.14%, which makes palm slightly cheaper to buyers who hold foreign currencies. $1 = 4.2120 Ringgit (Reporting and editing by Ashley Tang)
(source: Reuters)
