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Monday, October 3, 2022

Palm ends lower as Indonesia mulls lifting domestic sales rule

KUALA LUMPUR: Malaysian palm oil futures ended lower on Friday, after Indonesia said it was considering removing a domestic sales rule that has for months restricted exports from the world’s largest producer.

The contract for October delivery on the Bursa Malaysia Derivatives Exchange closed down 20 ringgit, or 0.54%, to 3,700 ringgit ($831.46) a tonne after early gains. It gained 3.1% this week after two consecutive weekly falls.

Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding back a recovery of palm oil fruit prices, the trade minister said.

If they remove the ruling, it could accelerate Indonesian exports at the expense of smaller rival Malaysia, which would pressure prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Palm oil futures plunge 5% tracking crude, soyoil prices

News about the possibility of major sunflower oil exporter Ukraine opening up its ports for agriculture exports also weighed, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Russia and Ukraine will sign a deal to reopen Ukraine’s Black Sea ports to grain exports, Turkey said, raising hopes that an international food crisis caused by Russia’s invasion could be eased.

Dalian’s most-active soyoil contract fell 1.4%, while its palm oil contract lost 2.4%. Soyoil prices on the Chicago Board of Trade were up 0.5%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm ends lower as Indonesia mulls lifting domestic sales rule

Source: Brecorder

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