KUALA LUMPUR: Malaysian palm oil futures slipped in early trade on Wednesday on profit-taking as concerns about higher output, especially in top producer Indonesia, weighed on sentiment.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.1 percent at 2,229 ringgit ($543.00) a tonne at the midday break.
Trading volumes stood at 7,579 lots of 25 tonnes each at noon.
“The market is seeing some profit-taking, it is also looking for further catalysts,” said a Kuala Lumpur-based futures trader, adding that traders were looking ahead to price forecasts by key industry analysts scheduled to speak at an industry conference in Kuala Lumpur.
Analyst Thomas Mielke on Tuesday forecast palm oil futures will likely rise to not more than 2,500 ringgit per tonne in the next six months, while the lower limit was at 2,100 ringgit.
“We’re also hearing that Indonesia is oversupplied,” the trader added, which contributed to the market’s concerns.
Palm oil output typically rises in the third and fourth quarter of the year in line with the seasonal trend.
Indonesia and Malaysia together account for nearly 90 percent of global palm oil supply.
In other related oils, the Chicago December soybean oil contract was up 0.1 percent while the January soybean oil contract on China’s Dalian Commodity Exchange declined 0.2 percent.
The Dalian January palm oil contract fell 0.1 percent.
Palm oil prices are impacted by movements of other edible oils, as they compete for a share in the global vegetable oils market.