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Wednesday, February 28, 2024

Malaysian palm oil sheds gains

MUMBAI: Malaysian palm oil futures erased early gains on Wednesday to close near their lowest level in 3-1/2 months as higher stocks and cheaper supplies of sunflower oil outweighed hopes for improved exports at lower price levels.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange eased 13 ringgit, or 0.36%, to close at 3,552 ringgit ($753.18) per metric ton, after rising to 3,611 ringgit earlier in the day. On Tuesday, the contract fell to the lowest level since June 23 at 3,520 ringgit.

“Palm oil prices have fallen, and so have prices of other edible oils. Palm oil has to compete with sunflower oil to retain market share,” said a Mumbai-based edible oil trader.

A flood of cheap sunflower oil from Russia and Ukraine is putting downward pressure on palm oil prices as the two top producers take advantage of currency depreciation to grab a larger share of the edible oils market.

Export numbers were quite good for the first 10 days of October, indicating demand has been improving at lower price level, the trader said. Exports of Malaysian palm oil products for Oct. 1-10 rose 12.5% to 29.6% from a month earlier, data from cargo surveyors showed. Malaysia’s palm oil stocks at the end of September rose 9.6% to 2.31 million tons, the highest level in 11 months, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday.

Indonesia, the world’s biggest palm oil exporter, will launch its crude palm oil (CPO) futures exchange on Friday, but it will not make trading via the exchange mandatory, its chief regulator told Reuters on Wednesday.

Soyoil futures on the Chicago Board of Trade were up 0.23%, as of 1027 GMT. The downward revision in US soybean crop production estimate is also supporting soyoil and other edible oils, the Mumbai-based trader said.

The US Department of Agriculture rated 51% of the soybean crop in good-to-excellent condition, down from 52% a week ago and the lowest for this time of year since 2012. Oil prices were little changed in early Asian trade, as concerns eased about potential supply disruptions due to the conflict between Israel and the Palestinian group Hamas.

Malaysian palm oil sheds gains

Source: Brecorder

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