Palm oil prices slip on profit-taking and Dalian weakness
Malaysian palm oil futures declined on Wednesday, after two consecutive sessions of gains. Prices were impacted by weaker Dalian vegetable oils and profit-taking as a relatively tighter'spread' against soyoil was a factor.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery had fallen 53 ringgit or 1.12% to 4,695 Ringgit ($1,148.48).
Anilkumar bagani, research head at Mumbai-based vegetable oils brokerage Sunvin Group, said that the CPO futures traded lower today as a result of profit-taking.
He also said that weakness in Dalian's palm oil futures during Asian hour weighed on the market.
Dalian's palm oil contract, which is the most active contract, lost 0.52% while soyoil contracts fell by 0.02%. Chicago Board of Trade soyoil prices were up by 0.44%.
As they compete to gain a share of global vegetable oil market, palm oil monitors the price changes of competing edible oils.
Malaysia's SD Guthrie is one of the largest palm oil producers in the world. It said Tuesday that it expects its production to be affected by El Nino, which will bring hotter and drier weather.
Prices of oil rose Wednesday morning, as concerns over Middle?East disruptions were fueled by doubts regarding a U.S. - Iran peace deal as well as?attacks against two ships.
Palm oil is a better option for biodiesel because crude oil futures are stronger.
The ringgit has strengthened by 0.05% against dollars, increasing the price of the palm for foreign currency holders. ($1 = 4,0880 ringgit). (Reporting and editing by Subhranshu Sahu; Reporting by Dewi Kurianawati)
(source: Reuters)
