VEGOILS-Palm oil closes lower tracking rival soyoil

Malaysian palm futures closed on Monday due to the weakness of rival Dalian and Chicago soybean oil prices, which was a result of concerns over Chinese purchases of U.S. soy beans.

The benchmark contract for palm oil delivery in February on the Bursa Derivatives Exchange dropped 58 ringgit or 1.4% to 4,094 Ringgit ($996.11) per metric ton.

The Farm Trade is a Kuala Lumpur based consultancy and trading firm. Director Sandeep Singh said, "Uncertainty about China bean purchases keeps the pressure on the soy complex. As with current loading it is unlikely that China would meet their initial purchase targets by the end of December, as per the agreement with the U.S."

According to a Tuesday shipping schedule, the U.S. is accelerating its exports of crops to China after a tariff war that stalled the trade for several months. At least six bulk vessels are scheduled to load soybeans in Gulf Coast terminals by mid-December.

The slow pace has led to fears that Beijing may fall short of the 12 million tons of soya bean purchases that the U.S. Cabinet members had forecast by the end this year. Beijing hasn't confirmed the target.

Dalian's palm oil contract, which is the most active contract, dropped by 0.23%. Chicago Board of Trade soyoil fell by 0.66%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.

Indonesia will require that natural resource exporters retain their foreign currency earnings for at least one year in state-owned bank and restrict their use, starting January 1, according to officials from the finance ministry.

(source: Reuters)