SINGAPORE: Malaysian palm oil futures reversed early gains on Tuesday to end a four-session climb, as investors weighed mixed demand signals from top global consumers.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 2 ringgit, or 0.05%, at 3,922 ringgit ($902.65) a metric ton.
The contract had risen 1.4% during the session before retreating.
Markets are looking for clearer direction amid quieter demand from China and excessive arrivals of palm oil in India, and as India’s agriculture ministry has reportedly suggested a hike in the import duty of edible oils, said Lingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Prices were earlier supported by the Indonesian Palm Oil Association’s estimates that Indonesia’s 2024 palm oil output would fall to 52-53 million tons from 54.84 million tons a year ago, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, citing a Bloomberg report.
Palm oil climbs to one-month high on Indonesia’s tax, biodiesel plans
Indonesia’s president elect Prabowo Subianto said that the upcoming implementation of the European Union’s deforestation regulation (EUDR) that could curb EU imports of Indonesian palm oil is a “blessing in disguise”, and that Indonesia will instead use more of its palm oil output for biodiesel.
Prabowo hopes to implement mandatory 50% palm oil-based biodiesel blending by early next year, which he said would cut fuel imports by $20 billion per year.
Indonesia’s trade ministry is mulling a plan to adjust its palm oil export tax to make it more competitive amid weak global demand, Bisnis.com reported on Monday, citing Isy Karim, a senior official at the ministry.
Dalian’s most-active soyoil contract advanced 1.76%, while its palm oil contract gained 1.56%. Soyoil prices on the Chicago Board of Trade shed 0.64%.
Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market.
The Malaysian ringgit, palm’s currency of trade, slipped 0.07% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Source: Brecorder
