Profit taking as Dalian oil and palm oil fall in value.
Malaysian palm oils futures declined on Wednesday, after two consecutive sessions of gains. This was due to a weaker Dalian vegetable oil and profit-taking.
The benchmark palm oil contract for October delivery at the Bursa Derivatives Exchange fell 51 ringgit or 1.07% to 4,697 Ringgit ($1,150.38).
Anilkumar bagani, research head at Mumbai-based vegetable oils brokerage Sunvin Group, said that the CPO futures traded lower today as they gave up some gains made earlier in the week.
He said that weakness in Dalian palm olein's futures during Asian hour also weighed on market.
Dalian's palm oil contract, which is the most active soyoil contract, fell by 0.71%. The Chicago Board of Trade Soyoil Prices fell 0.04%.
As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.
A circular posted on the Malaysian Palm Oil Board's website on Wednesday showed that Malaysia had lowered the September crude palm oil price reference to a level which maintains the 10% export duty.
Malaysia's SD Guthrie is one of the largest palm oil producers in the world. It said Tuesday that it expects to see a decline in production between 2027 and 2028 due to El Nino's predicted drier, hotter climate.
Oil prices rose Wednesday as a result of?attacks against two ships, which reinforced fears about disruptions in?Middle East supply. However, industry data showing swollen inventories of U.S. oil might hold bulls back.
Palm oil is a better option as a biodiesel feedstock because of the stronger?crude oil prices.
The dollar has strengthened by 0.17%, which makes palm slightly more expensive to buyers who hold foreign currencies. ($1 = 4,0830 ringgit). (Reporting and editing by Subhranshu Sahu; Reporting by Dewi Kurianawati)
(source: Reuters)
