VEGOILS - Palm slips over 1% due to bearish MPOB data but still posts weekly gains
Malaysian palm futures fell?more? than 1% Friday, as industry data revealed that the stocks had risen to a four-month high in June.
By the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for September delivery was down 83 Ringgit or 1.81% at 4,511 Ringgit ($1,109.17).
This is the first time in three weeks that the contract has gained 0.69%.
Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He said that with Malaysian Palm Oil Board stockpiles "at these levels", traders expect a weaker absorption of demand, which will result in downward pressure on prices.
The weakening of rival oils also impacted prices, as Dalian's palm oil contract fell 1.76% and Dalian's soyoil contract dropped 0.93%. Chicago Board of Trade soyoil prices fell 0.2%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The oil price eased, but remained on course for a weekly gain as the renewed U.S. - Iran fighting disrupted shipping through the Strait of Hormuz. This stoked?concerns about supply disruptions.
Palm oil is less attractive as a biodiesel feedstock due to weaker crude oil futures.
Cargo surveyors estimate that the exports of Malaysian palm oil for July 1-10?rose between 1,6% and 5,1% compared to a month earlier.
Bahlil lahadalia, Indonesian Energy Minister, said that Indonesia's mandate for increasing the biodiesel mix to 50% palm-oil based fuel will increase crude palm oil consumption to between 16.3 and 17 million metric tonnes from 15.2 millions tons. ($1 = 4.0670 ringgit)
(source: Reuters)
