Thursday, 05 November 2015 17:44
KUALA LUMPUR: Malaysian palm oil fell on Thursday to reverse some of the gains in the previous session following news of a large Indonesian biodiesel deal, as ample supplies prompted some traders to lock in profits.
The January benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.6 percent to end at 2,345 ringgit ($ 546.37) a tonne.
“Next week is Diwali, so there is some profit taking ahead of that,” said a trader based in Kuala Lumpur, referring to the Hindu festive celebration. “This is usually a demand driven market, and at the moment supply is more.”
Palm gained over 2 percent on Wednesday after top exporter Indonesia announced the companies that had won quotas to supply biodiesel to state-owned energy firm Pertamina.
News that Pertamina does not expect to import any gasoil in 2016 given government rules to encourage the use of biodiesel also supported prices of palm oil, which is used for blending into biodiesel.
Traders however had said palm’s rally on Pertamina’s news wouldn’t last long unless it sees concrete demand from top consumers China and India.
Traded volume stood at 45,497 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day.
Signals are mixed for palm oil as it faces resistance at 2,373 ringgit per tonne, said Reuters market analyst for commodities and energy technicals Wang Tao.
In other vegetable oil markets, the US December soyoil contract fell 0.1 percent, while the January soybean oil contract on the Dalian Commodity Exchange gained 0.6 percent.