Palm oil plunge 5% tracking crude, soyoil prices
Malaysian palm oil futures tumbled more than 5% on Thursday, tracking losses in crude futures and rival edible oils, while traders booking profits after recent gains also weighed on sentiment.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid 213 ringgit, or 5.41%, to 3,722 ringgit ($835.47) a tonne.
“Palm swung lower in a week of fluctuating trade but overall sentiments appears to be turning positive though still highly cautious,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
The contract was in profit-taking mode and weighed down by weaker Chicago soy oil, he added.
Exports from Malaysia during July 1-20 fell between 2% and 9.6% from the month before, cargo surveyors said on Wednesday.
Dalian’s most-active soyoil contract fell 0.5%, while its palm oil contract lost 1.4%. Soyoil prices on the Chicago Board of Trade were down 2.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell more than $3 after higher U.S. gasoline stockpiles stoked demand worries and returning energy supply from Libya and Russia eased supply concerns.
Weaker crude makes palm a less attractive option for biodiesel feedstock.
Source: Reuters (Reporting by Mei Mei Chu; editing by Uttaresh.V and Rashmi Aich)