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Malaysian palm oil price hits 8-month low on concerns over rising output
KUALA LUMPUR: Malaysian palm oil futures fell on Tuesday, recording a fifth consecutive session of losses, weighed down by forecasts of rising output and tracking weaker performing rival oils.
The benchmark palm oil contract for July delivery
on the Bursa Malaysia Derivatives Exchange edged down 1 percent to 2,473 ringgit ($560.90) a tonne at the end of the trading day.
It earlier fell to an intraday low of 2,468 ringgit, its lowest levels since Aug. 11.
Traded volumes stood at 59,760 lots of 25 tonnes each on Tuesday evening.
“The market is down on weaker soyoil, and also on continued concerns of higher supplies both in Malaysia and Indonesia,” a Kuala Lumpur-based futures trader said.
Production growth in the world’s top producers of the tropical oil is forecast to recover between now and the third quarter of the year, as the lingering effects of a crop damaging El Nino wear off.
Malaysian production rose for the full month of March, up 16.3 percent from February, its first monthly gain since September, in line with seasonal trends.
Palm oil prices are also affected by movements in rival edible oils as they compete for a share in the global vegetable oils market.
Soybean oil on the Chicago Board of Trade was down 0.8 percent, while the September soybean oil contract on the Dalian Commodity Exchange fell 1.4 percent.
In other related vegetable oils, the September contract for palm olein declined 1.3 percent.
Palm oil is expected to test a support at 2,484 ringgit, a break below which could cause a further loss into 2,437-2,464 ringgit range, a Reuters market analyst for commodities and energy technicals said.
In Europe EU rapeseed oil prices were mostly lower on Tuesday, dragged down by a decline in CBOT soyoil, as trading in European vegetable oil markets resumed after the long holiday weekend.EU rapeoil asking prices ranged between unchanged and five euros a tonne lower than Thursday’s final levels.
The most active CBOT soyoil contract was down 1.9 percent at 31.20 cents per lb, reversing direction after climbing on Monday when European markets were shut.Crude palm oil offers were little changed with rising production in Malaysia and Indonesia keeping a lid on prices.
Malaysian production rose for the full month of March, up 16.3 percent from February, its first monthly gain since September, in line with seasonal trends.Palmkernel oil for April/May shipment changed hands at $990 a tonne, down $10 from a trade on Thursday, while coconut oil for May/June shipment was traded at $1,565 a tonne and at $1,500 a tonne for a Jun/July shipment.
– Reuters
Source: http://www.thestar.com.my/business/business-news/2017/04/19/palm-hits-8-month-low-on-concerns-over-rising-output/#S0XpqWuFPa25GacY.99