Palm prices fall on Dalian's weakening and lack of new buying
Malaysian palm futures declined on Monday as a result of weaker edible oil at Dalian futures. A lack of new buying also added to the pressure.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for November delivery had fallen 4 ringgit or 0.09% to 4,444 Ringgit ($1,053.58) per metric ton.
Anilkumar bagani, the research head at Mumbai-based Sunvin Group's vegetable oil brokerage, explained that the lack of new buying, particularly from India, had further pushed up prices, despite the fact that production in both Malaysia and Indonesia was decent during August.
Dalian's palm oil contract, which is the most active contract, fell 0.4% while soyoil prices dropped 0.1%. The Chicago Board of Trade's (CBOT), soyoil price rose by 0.35%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
A survey shows that Malaysian palm oil inventories will rise for the sixth consecutive month in august, as production continues outpacing exports, despite an improvement in demand.
Customs data released on Monday showed that China's imports of soybeans increased to 12,28 million metric tonnes, or 1.15 percent year-on-year. This was the highest ever for the month August.
The oil prices rose more than 1% this week, reversing some of the losses of last weekend, as more sanctions against Russian crude following an overnight attack on Ukraine countered OPEC+’s planned increase in production.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency firmed by 0.05% against dollars, making it slightly more expensive for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could retest the support level of 4,405 ringgit for a metric ton. A break below this mark would open up the possibility of a move towards 4,367-4381 ringgit, Wang Tao added. $1 = 4.2180 Ringgit (Reporting and editing by Sumana Niandy; Dewi Kurniawati)
(source: Reuters)
