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Wednesday, August 10, 2022

Palm falls for fifth day on recession woes, Indonesia’s export rules

KUALA LUMPUR: Malaysian palm oil futures extended losses for a fifth session in a row on Thursday, as persistent concerns over a global recession hammered the market, while Indonesia mulling more policy changes to encourage exports also weighed on sentiment.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange slid 52 ringgit, or 1.28%, to 4,003 ringgit ($904.84) a tonne by the midday break.

It declined 3.9% overnight, also pressured by demand concerns as rival and top producer Indonesia, which is facing soaring inventories, raised its export volumes.

Indonesia is discussing the possibility of cutting the palm oil export levy to help stimulate more overseas shipments, senior cabinet minister Luhut Pandjaitan said.

Palm oil jumps over 6pc

Luhut said he expected shipments to run more smoothly in the next two weeks.

Tighter monetary policy around the world is dragging the contract but on the other hand, prices are supported by slow production in labour-starved Malaysia, a Kuala Lumpur-based trader said.

“Palm prices looks well-supported as discount to soybean oil is wider and prices have fallen to induce buying activity,” the trader added.

Dalian’s most-active soyoil contract rose 1.1%, while its palm oil contract slumped 1.2%. Soyoil prices on the Chicago Board of Trade were up 1.9%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Brent crude futures extended declines for a third session on Thursday, slipping under $100 a barrel, as fears of a potential global recession spurred concerns about oil demand. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Palm oil may retest a support at 3,782 ringgit per tonne, a break below could open the way towards 3,592 ringgit, Reuters technical analyst Wang Tao said.

Palm falls for fifth day on recession woes, Indonesia’s export rules

Source: Brecorder

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