Malaysian palm oil price hits lowest level in a month

KUALA LUMPUR: Malaysian palm oil futures fell by more than 2% on Wednesday to hit their lowest levels in a month, triggered by weakness in U.S. soyoil prices on the Chicago Board of Trade.

Palm oil prices had were earlier traded within a range, with the competing forces of expectations for bullish industry data and weakness in soyoil and crude oil prices.

Malaysia’s palm oil stockpiles at the end of May dropped 10.3% from the previous month to 2.45 million tonnes, industry regulator the Malaysian Palm Oil Board said on Wednesday.

Production in May rose 1.3% month-on-month to 1.67 million tonnes. Exports climbed 3.5% from April to 1.71 million tonnes last month, the MPOB data showed.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was last down 1.8% at 1,971 ringgit ($474.37) per tonne at the close of trade, its sharpest daily decline in a week.

It earlier fell as much as 2.1% to 1,964 ringgit, its lowest level since May 13.

“Market gains earlier were capped by weaker external markets,” a futures trader in Kuala Lumpur said, referring to CBOT U.S. soyoil, adding that the market’s subsequent decline was due to sharper soyoil falls.

The Chicago July soybean oil contract, which had fallen 0.6% on Tuesday, was down 0.8%.

Meanwhile, the September soyoil contract on the Dalian Commodity Exchange fell 1% and the Dalian September palm oil contract eased 1.1%.

Palm oil prices are affected by movements in related edible oils, with which it competes for global market share. – Reuters

Source: TheStar