Palm oil swings on biofuel demand outlook and output concerns
Palm oil prices fluctuated due to poor production outlooks and reduced biofuel appeal following recent declines in crude oil prices. Crude oil fell 3.7% before partially recovering, trading below $70 per barrel for the first time in over two years due to global demand concerns. Despite a slight production increase in Malaysia, palm oil prices for November delivery remained little changed at RM3,886/tonne. Soybean oil prices also varied, with palm oil’s discount over soybean oil narrowing significantly.
Palm oil fluctuated on its poor production outlook and concerns about the tropical oil’s biofuel appeal, following recent declines in petroleum prices.
Crude oil dropped 3.7% in the previous session, before partially recovering on Wednesday. The commodity, which has slipped in nine out of 12 sessions, traded below US$70 (RM302.95) a barrel for the first time in more than two years, on concerns about global demand.
Palm oil is reacting to moves in crude oil, said David Ng, a senior trader at IcebergX Sdn Bhd. Still, concerns about the pace of production in Malaysia are likely to support the market, he said.
Output in the world’s second-biggest grower rose less than 3% in August from a month earlier, the Malaysian Palm Oil Board’s (MPOB) data showed on Tuesday. That compared with a surge of 14% in July.
Source Link : https://theedgemalaysia.com/node/726339
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