KUALA LUMPUR: Malaysian palm oil futures dropped on Wednesday for a fourth consecutive session, weighed down by losses in rival edible oils.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange slid 137 ringgit, or 2.9%, to 4,588 ringgit ($1,027.32) a metric ton by the midday break.
The market was pressured by the sell-off in Chicago soyoil futures overnight and in Asian hours on Wednesday, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.
Weaker momentum in Chinese vegetable oil futures and declining energy prices also weighed on the market, he said.
The performance of Malaysian palm oil exports in the first half of December is shaky as destination markets like India and China are not willing to chase palm oil at such a steep premium over soft oils in general and soy oil in particular, he said.
Dalian’s most-active soyoil contract fell 3.2%, while its palm oil contract shed 1.8%. Soyoil prices on the Chicago Board of Trade were down 2.41%.
Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market.
Oil traded in a narrow range as investors remained cautious ahead of an expected rate cut by the US Federal Reserve, while weighing up the potential supply impact of tighter sanctions on Russia.
Palm declines for third straight session on poor demand from key markets
Malaysia maintained its January export tax for crude palm oil at 10% and raised its reference price to 5,001.72 ringgit per ton, a circular on the Malaysian Palm Oil Board website showed.
The European Parliament gave its final approval to a one-year delay of Europe’s landmark deforestation law, which will begin from December 2025.
Palm oil may test support at 4,624 ringgit per ton, with a good chance of breaking below this level and falling towards 4,527 ringgit, Reuters technical analyst Wang Tao said.
Source: Brecorder
