NEW DELHI: Malaysian palm oil futures ended lower on Tuesday after industry data showed inventories in the world’s second-largest producer rose more than expected last month.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 12 ringgit, or 0.31%, at 3,883 ringgit ($894.70) a metric ton.
Malaysia’s palm oil stocks at the end of August rose 7.34% from the previous month to 1.88 million metric tons, the highest level in six months, the Malaysian Palm Oil Board (MPOB) said.
Crude palm oil production gained 2.87% to 1.89 million tons, while palm oil exports fell 9.74% to 1.53 million tons, the board said.
A Reuters survey had forecast inventories at 1.86 million tons, with output seen at 1.89 million tons and exports at 1.5 million tons.
Palm oil may retest support at 3,856 ringgit per ton, a break below which could trigger a fall to 3,833 ringgit, Reuters technical analyst Wang Tao said.
Oil prices gave up the previous day’s gains on Tuesday as weak Chinese demand offset US supply disruptions from Tropical Storm Francine and global oil oversupply risks that continue to weigh on the market.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Global shares steadied on Tuesday, struggling to draw momentum from a rally on Wall Street as concerns about faltering economic growth dampened investor sentiment, which also dented the oil price.
Source: Brecorder
