Palm prices slip on weak demand and rising production

Malaysian palm oil futures fell on Monday as prices were pressured by a sluggish demand from major markets and a rising production.

By midday, the benchmark 'palm oil contract' for July delivery at the?Bursa?Malaysia Derivatives Exchange had fallen 39 ringgit (0.85%) to 4,558 Ringgit ($1,153.92). 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 and a higher production scenario for April have dragged palm oil prices down.

He said that "destination buying was very quiet, apart from some purchases from China last week. But it failed to support the palm oil prices on a longer-term basis."

Intertek Testing Services, a cargo?surveyor, estimated that the exports of Malaysian Palm?oil for April '1-25 were down 15.7% compared to a month ago. AmSpec Agri Malaysia is an independent inspection company and will provide its estimates later today.

Dalian's soyoil contract with the highest volume fell by 0.44% while palm oil contracts increased by 0.17%. Chicago Board of Trade soyoil prices were up by 0.53%.

Palm oil tracks the price movement of competing edible oils as it competes to gain a share in the global vegetable oils market.

Oil prices continued to rise, gaining nearly 2%, as peace talks stalled between the U.S. and Iran, while shipments via the Strait of Hormuz were limited. This kept global oil supplies in tight supply.

Palm oil futures are more appealing due to the stronger crude oil prices.

Palm's trade currency, the ringgit, has strengthened by 0.3% against the US dollar, making it more expensive for buyers with foreign currencies.

Technical analyst Wang Tao stated that palm?oil appears neutral within a range of 4,584-4 639 ringgits per ton. An escape could indicate a direction.

(source: Reuters)