Palm oil prices flatten as Dalian oils outperform weak demand
The price of Malaysian palm oils futures was largely unchanged on Thursday, as Dalian Oils, a stronger competitor, supported the market. However, weak demand, particularly from India, offset the gains.
The benchmark palm-oil contract for September delivery at Bursa Malaysia's Derivatives exchange rose by 2 ringgit or 0.05% to 4,102 Ringgit ($963.59) per metric ton.
Anilkumar bagani, research director at Mumbai-based vegetable oils broker Sunvin Group, stated that the market was trading in a sideways direction following an upward trend seen in Chinese soybean oil futures during Asian hours and a persistent bullish tendency in ultra-low-sulfur diesel (ULSD futures).
Bagani said that the lack of new buying support by destination markets, and the low demand for Indian products, capped the gains.
Dalian's soyoil contract was the most active, rising 1.44%. Palm oil contracts rose 0.45%. Chicago Board of Trade closed due to a public holiday.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
The oil prices increased after Israel and Iran exchanged missile attacks over night and U.S. president Donald Trump's position on the conflict put investors on edge.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Four trade sources confirmed that Indian refiners canceled orders for 65,000 tons of crude palm (CPO) due for delivery between July and September, following an unexpected surge in Malaysian benchmark prices.
The palm ringgit's currency has weakened by 0.21% compared to the U.S. Dollar, resulting in a slight price drop for foreign buyers. ($1 = 4.2570 ringgit)
(source: Reuters)
