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Tuesday, December 7, 2021

Palm oil reverses gains on slow demand, high end-stocks

Palm oil reverses gains on slow demand, high end-stocksKUALA LUMPUR: Malaysian palm oil reversed gains and snapped its uptrend on Monday evening as it fell on slowing demand and high stockpiles.

The January benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange lost 1.5 percent to close the trading day 2,328 ringgit ($ 541.77) a tonne.

“Demand has been slow coupled with stocks building up,” said a trader based in Kuala Lumpur.

Another trader had earlier said low crude oil prices due to news of slowing demand from China may dampen palm prices despite gains in rival oils.

Traded volume stood at 38,685 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day.

Crude oil prices fell on Monday on the back of weak factory output data from China, which slowed in October for an eighth straight month.

Palm oil often takes price direction from crude oil, as vegetable oils are increasingly used in making renewable fuels.

In other vegetable oil markets, the US December soyoil contract fell 0.6 percent while the January soybean oil contract on the Dalian Commodity Exchange gained 0.7 percent.

Copyright Reuters, 2015

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