KUALA LUMPUR: Malaysian palm oil futures slipped lower on Tuesday for a second consecutive session, tracking weaker rival edible oils.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 48 ringgit, or 1.11%, to 4,290 ringgit ($951.43) a metric ton in early trade.
Dalian’s most-active soyoil contract fell 0.11%, while its palm oil contract shed 0.75%. Soyoil prices on the Chicago Board of Trade were down 0.6%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices extended losses to a second straight session on a technical correction after last week’s rally, while forecasts for ample supply and a firm dollar also weighed.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.04% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysia’s palm oil inventories are forecast to fall in December, for a third consecutive month, amid declining production due to recent heavy rainfall that affected the harvest, a Reuters survey showed.
Palm oil may fall into 4,161 ringgit to 4,202 ringgit per metric ton, as it has completed a weak bounce, Reuters technical analyst Wang Tao said.
Asia shares rose on Tuesday, tracking Wall Street’s positive lead and as some investors hoped incoming U.S. President-elect Donald Trump could adopt a less aggressive tariff stance than promised when he takes office.
Source: Brecorder
