VEGOILS-Palm sheds early gains to end near 3-1/2-month low as inventories weigh
MUMBAI, Oct 11 (Reuters) – Malaysian palm oil futures erased early gains on Wednesday to close near their lowest level in 3-1/2 months as higher stocks and cheaper supplies of sunflower oil outweighed hopes for improved exports at lower price levels.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange eased 13 ringgit, or 0.36%, to close at 3,552 ringgit ($753.18) per metric ton, after rising to 3,611 ringgit earlier in the day.
On Tuesday, the contract fell to the lowest level since June 23 at 3,520 ringgit.
“Palm oil prices have fallen, and so have prices of other edible oils. Palm oil has to compete with sunflower oil to retain market share,” said a Mumbai-based edible oil trader.
A flood of cheap sunflower oil from Russia and Ukraine is putting downward pressure on palm oil prices as the two top producers take advantage of currency depreciation to grab a larger share of the edible oils market.
Exports of Malaysian palm oil products for Oct. 1-10 rose 12.5% to 29.6% from a month earlier, data from cargo surveyors showed.
Malaysia’s palm oil stocks at the end of September rose 9.6% to 2.31 million tons, the highest level in 11 months, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday.
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