Palm oil dips on India’s import cut plans; set for worst week in 9 month
Malaysian palm oil futures extended losses to a fourth session on Friday, set for their worst week in nine months after top buyer India sought to cut vegetable oil imports, while prolonged weakness in rival edible oils also weighed on sentiment.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange fell 18 ringgit, or 0.47%, to 3,780 ringgit ($799.83) a metric ton by midday break.
The contract has declined about 5.9% so far this week, on track for its sharpest weekly decline since May 2.
The overarching issue is that the edible oils market is entering a period of low demand, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
India would step up efforts to boost local oilseed production, the finance minister said on Wednesday, as part of plans to cut pricey imports of vegetable oils from the world’s top edible oil producers.
Dalian’s most-active soyoil contract fell 1.19%, while its palm oil contract declined 1.07%. Soyoil prices on the Chicago Board of Trade dipped 0.46%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Chinese demand will be a key concern going forward, Saiya added.
“The Lunar Festival buying seems to have concluded, and the focus now shifts to China’s economic situation and what they do post festival.”
China’s private-sector Caixin/S&P Global manufacturing PMI stayed at 50.8 in January, unchanged from December. The reading contrasted with an official survey that showed manufacturing activity contracted for the fourth straight month.
Cargo surveyor Societe Generale de Surveillance (SGS) estimates exports of Malaysian palm oil products in January at 1.17 million tons, up 0.19 million tonnes from December, according to LSEG data.
Other independent cargo surveyors, Intertek Testing Services and AmSpec Agri Malaysia, estimated that Malaysian palm oil product exports for January fell 6.7% and 9.4%, respectively from the previous month.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.02% against the dollar.
Palm oil may test support of 3,771 ringgit per metric ton, said Reuters technical analyst Wang Tao.
Source Link: https://economictimes.indiatimes.com/industry/energy/oil-gas/palm-oil-dips-on-indias-import-cut-plans-set-for-worst-week-in-9-months/articleshow/107348183.cms?from=mdr
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