Palm prices fall on weak demand and rising production
Malaysian palm futures fell more than 1% Monday due to a sluggish market demand.
At the close, the benchmark 'palm oil contract' for July delivery on the Bursa Derivatives exchange fell 62 ringgit (1.35%) to 4,535 Ringgit ($1,148.10) per metric ton. The contract increased by 0.39% during the previous session.
Anilkumar bagani, head of commodity research at Sunvin Group in Mumbai, says that a weaker Malaysian palm oil performance has led to a drop in the price of palm oil.
He said that "destination buying was very quiet, apart from a few purchases from China last weekend. But it failed to support the palm oil prices in the long term."
Exports of palm oil-based products from Malaysia for the period April 1-25 were estimated to have fallen between 15.7% and 16.8% compared to a month ago.
Dalian's palm oil contract, which is the most active contract, fell 0.05%. Prices of soyoil on the Chicago Board of Trade rose 0.04%.
As it competes to gain a share in the global vegetable oil market, palm oil closely tracks the price fluctuations of its rival edible oils.
Prices of oil?rose almost 3% after peace talks between Iran and the U.S. stalled. Also, shipments through the Strait of Hormuz were limited and kept?global supplies tight.
Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.
The palm ringgit's currency of trade has strengthened by 0.3% versus the dollar, increasing the price for buyers who hold foreign currencies. ($1 = 3.9500 ringgit)
(source: Reuters)
