Palmettos fall on increasing stocks but exports are strong and limit losses
The price of Malaysian palm oils futures dropped on Tuesday after two sessions of gains. Rising May-end stocks weighed the contract down but good export data for June supported it.
The benchmark palm-oil contract for August delivery at the Bursa Derivatives Market lost 61 Ringgit or 1.55% to $3,864 ringgit (USD912.83) by closing.
Market participants expect stockpiles will continue to build in the months to come after MPOB confirmed that May 2025 stocks rose to an 8-month high. However, higher exports may cushion some of the losses," said a Kuala Lumpur based trader.
Malaysian palm oil stock at the end May increased to 1,99 million tons, a third consecutive increase in spite of booming exports.
According to AmSpec Agri Malaysia, an independent inspection company, and Intertek Testing Services cargo surveyors, the exports of palm oil products from Malaysia rose between 8.1% to 26.4% in June 1-10 compared to May.
Dalian's palm oil contract, which is the most active contract in Dalian, lost 0.47%. Chicago Board of Trade soyoil prices were up by 0.46%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
As market participants awaited the outcome of U.S. China talks, which could ease trade tensions and increase fuel demand, oil prices increased.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, has weakened by 0.09%, making it slightly cheaper for foreign buyers.
(source: Reuters)
