VEGOILS-Palm tracks rival oils lower, weaker ringgit lends support
KUALA LUMPUR, Jan 17 (Reuters) – Malaysian palm oil futures fell on Wednesday, weighed by weakness in rival vegetable oils in the Dalian and Chicago futures markets, although a weaker ringgit lent some support to the benchmark contract.
The benchmark palm oil contract FCPOc3 for April delivery on the Bursa Malaysia Derivatives Exchange slid 26 ringgit, or 0.67%, to 3,836 ringgit ($813.92) by midday.
Weakness across rival oilseeds has strained Malaysian palm oil futures, with the contract also facing a technical correction after many days of upside, a Kuala Lumpur-based trader said.
Palm oil is affected by the price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit MYR=, palm’s currency of trade, fell 0.49% against the dollar, making the commodity less expensive for buyers holding foreign currency.
Oil fell on Wednesday as economic growth in China, the world’s second-largest crude user, slightly missed expectations, raising concerns about future demand increases while the U.S. dollar’s strength dented investors’ risk appetite. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Exports of Malaysian palm oil products for Jan. 1-15 were estimated to be down 2.6% at 604,474 tons from a month earlier, independent inspection company AmSpec Agri Malaysia said on Monday.
Data from cargo surveyor Intertek Testing Services showed that exports for Jan. 1-15 rose 6.5% to 629,918 tons.
India will extend the lower duty on edible oil imports by another year until March 2025, as the world’s biggest vegetable oil importer moves to contain local prices.
Palm oil is biased to drop to 3,818 ringgit per ton, as it faces strong resistance at 3,868 ringgit, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.7130 ringgit)
