Palm falls on profit-taking but output worries cap losses
Malaysian palm oil futures fell on Monday, with December contracts dropping 32 ringgit (0.72%) to 4,410 ringgit/MT amid profit-taking. Concerns over lower-than-expected production cuts and potential higher Indian import duties tempered gains. Crude oil rises supported biodiesel demand, while soyoil prices in Chicago gained 0.6%, and the ringgit weakened 0.14% vs the dollar.
KUALA LUMPUR: Malaysian palm oil futures declined on Monday, dragged down by profit-taking, though concerns over a drop in output supported prices.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange slid 32 ringgit, or 0.72%, to 4,410 ringgit ($1,047.01) a metric ton at the midday break.
It ended Friday 0.09% lower at 4,442 ringgit.
Crude palm oil futures also fell on profit-taking amid strong market talk of a possibility that India may raise import duties on vegetable oils, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.
There are concerns over the lower-than-expected reduction in Malaysian palm oil production, Bagani added.
The Malaysian palm oil board (MPOB) is expected to release its supply and demand data for September on October 10. Oil prices rose about 1.5% after OPEC+ announced a more modest monthly increase in production than expected, tempering some concerns about supply additions, though analysts expect near-term gains to be capped by a soft demand outlook.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.6%.
The Dalian Commodity Exchange is closed from October 1 to 8 on account of public holidays.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.14% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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Source : Business Recorder
