Palm prices fall from a 21-month high due to weak exports and stock forecasts
Malaysian palm futures fell from a 21-month high to trade at a little bit lower on Thursday, mainly due to 'weak exports' and 'expectations that stocks will rise this month.
By midday, the benchmark palm oil contract on Bursa Derivatives exchange for December delivery was down by 2 ringgits, or 0.04%. It stood at 4,996 Ringgit ($1,220.17) per metric ton. The contract reached its highest level in December 2024 earlier in the day.
"Palm Oil Fundamentals Remain?Weakened by September Exports and Expectations that End-Month Stocks Could Rise to Around?3 Million Tons," said Paramalingam Supramaniam a director of Selangor based brokerage Pelindung Bestari.
He said that the market was influenced by speculation that India could reduce import duties on vegetable oil and that Indonesia might increase its biodiesel mandate.
Dalian's most active soyoil contract increased by 0.4% while its palm oil contract grew by 0.18%. Chicago Board of Trade soyoil prices were down by 0.29%.
As palm oil competes to gain a share in the global vegetable oils industry, it is closely tracking rival edible oils.
The major palm oil producing region in Indonesia, Kalimantan, could see its output fall between 12% and 15% by the end of the fourth quarter due to prolonged dry weather conditions and widespread fires.
Exports of Malaysian Palm Oil Products for the period September 1 to 15 were estimated by cargo surveyors to have fallen between 17.8% and 25,6% from one month earlier.
The palm's currency, the?ringgit?, fell by 0.31% in value against the dollar. This made the commodity more affordable for buyers who hold foreign currencies.
Prices of oil eased as a result of reports that Saudi Arabia was offering extra crude cargoes through Oman. This reduced concerns of supply disruptions. However, prices remained above $100 due to fears about the Middle East conflict spreading.
Palm oil is less appealing as a biodiesel feedstock because of the weaker?crude futures.
Technical analyst Wang Tao believes that palm oil is likely to break through a resistance level of 4,903 Ringgit per ton and move more towards 4,930 Ringgit.
(source: Reuters)
