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Malaysian palm oil price hits 3-year low on rising output, stocks outlook
KUALA LUMPUR: Malaysian palm oil futures fell to a three-year low on Thursday, weighed down by expectations of rising production and end-stocks in producer nations Indonesia and Malaysia.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed down 0.6 percent at 2,146 ringgit ($519) a tonne. It had touched an intraday low of 2,173 ringgit, its weakest level since Sept. 21, 2015.
Trading volumes totalled 54,988 lots of 25 tonnes each on Thursday.
“Sentiment continues to be clouded with high stocks, as higher exports are unable to offset the rising output,” said a Kuala Lumpur-based futures trader.
“The market is expecting production to peak later in the year.”
In Malaysia, the world’s second-largest producer and exporter, palm oil shipments during Sept. 1-20 jumped over 70 percent from a month earlier, reported cargo surveyors AmSpec Agri Malaysia, Intertek Testing Services and Societe Generale de Surveillance on Tuesday.
Production however is expected to rise towards the year end in line with seasonal trends. Indonesia’s palm oil production likely rose in August from a month earlier and was at its highest level in at least four years as weather conditions helped cultivation, while exports saw a small dip, a Reuters survey showed.
In other related oils, the Chicago September soybean oil contract edged down 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange dropped 0.7 percent.
The Dalian January palm oil contract declined 1.5 percent.
Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market. – Reuters
Source: https://www.thestar.com.my/business/business-news/2018/09/21/palm-hits-three-year-low-on-rising-output-stocks-outlook/#d62Cbm6VKgXUYTFq.99