KUALA LUMPUR: Malaysian palm oil futures fell to a four-month low on Monday, tracking softer edible oils on the Chicago Board of Trade and China’s Dalian Commodity Exchange.
Higher-than-forecast production growth and technical selling also contributed to the fall, traders said on Monday evening.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange was down 1.6 percent at 2,589 ringgit ($629.47) a tonne at the close of trade. It fell to 2,565 ringgit, its lowest in four months and matching the lowest daily levels of July 25.
Traded volumes stood at 47,399 lots of 25 tonnes each at the close of trade.
“The market was under pressure on the sharp drop in Dalian palm olein,” said a futures trader from Kuala Lumpur, adding that a positive production outlook also weighed.
Production in Malaysia, the world’s second largest producer after Indonesia, last rose 12.9 percent by the end of October, according to industry regulator data.
Another trader said palm also weakened on a technical selling.
Falling exports could further weigh. Shipments from Malaysia fell 8.4 percent for the Nov. 1-25 period, according to cargo surveyor Intertek Testing Services on Saturday.
Another cargo surveyor Societe Generale de Surveillance had reported a decline of 8.6 percent in Malaysian exports during the same time period.
In other related edible oils, the December soybean oil contract on the Chicago Board of Trade was down 0.4 percent, while the January soybean oil contract on the Dalian Commodity Exchange fell 0.8 percent.
Dalian’s January palm olein contract dropped 1.7 percent. Palm oil is impacted by movements in other edible oils as they compete for a share of the global vegetable oils market.
Palm oil may fall into a range of 2,519-2,555 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals. – Reuters