Palm oil falls on expectations of rising supply

Malaysian palm oil futures fell more than 3 per cent in early trade on Thursday, weighed down by rising supply outlook and higher selling pressure from larger producer Indonesia.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 76 ringgit, or 1.97 per cent, to 3,788 ringgit ($850.47) a tonne during early trade, down for a third in four sessions.

FUNDAMENTALS

* Malaysia’s palm oil stocks at end-July likely rose by 9.8 per cent from the previous month to 1.82 million tonnes due mainly to higher output, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

* The first grain ship to leave a Ukrainian port in wartime passed through the Bosphorus Strait on Wednesday en route to Lebanon for a delivery that foreign powers hope will be the first of many to help ease a global food crisis.

* The shipment raises hope for better Black Sea supplies, Refinitiv Commodities Research said in a note late Wednesday. The Black Sea accounts for 60 per cent of world sunflower oil output and 76 per cent of exports.

* Lower payable export duties and higher exportable volumes in Indonesia has made its palm oil more competitive than Malaysian palm oil.

* Dalian’s most-active soyoil contract fell 3.3 per cent, while its palm oil contract slipped 4.1 per cent. Soyoil prices on the Chicago Board of Trade were down 1.2 per cent.

* Palm oil may test a support at 3,717 ringgit per tonne, a break below could open the way towards 3,489-3,598 ringgit range, Reuters technical analyst Wang Tao said.

Published on

August 04, 2022

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