Palm eases on lower July exports, output concerns provide support
Malaysian palm oil futures edged down on Wednesday on a decline in July exports so far and lower rival Chicago soyoil prices, but losses were capped by a weaker ringgit and supply worries.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange ended down 6 ringgit, or 0.14%, at 4,145 ringgit ($979.91) a tonne, after falling as much as 1.76% during the session.
Prices dropped as poor performance in both the Dalian and Chicago exchanges prompted traders to book profits, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
A weaker ringgit and firmer physical crude palm oil prices helped prevent a major sell-off, he added.
The ringgit MYR=, palm’s currency of trade, fell 0.19% against the dollar to its lowest since August 2020, making palm more attractive to holders of foreign currencies.
Export shipments from Malaysia during July 1-20 fell 7.9% to 863,586 tonnes compared with the same period in June, cargo surveyor Amspec Agri said.
There are risks that palm oil production could come in below the potential due to the impact of lower fertiliser usage over the last two years and a worker shortage in Malaysia, Ong Chee Ting, an analyst at Maybank Kim Eng, said in a note.
Dalian’s most-active soyoil contract DBYcv1 fell 0.3%, while its palm oil contract DCPcv1 was unchanged. Soyoil prices on the Chicago Board of Trade BOcv1 were down 1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; editing by Vinay Dwivedi and Aditya Soni)