Palm slumps to 15-month low after price warning from analyst
Malaysian palm oil futures fell more than 8% on Monday to hit their lowest in 15 months, after a leading industry analyst warned that prices would plunge by more than 30% by the end of this year due to ample supply and weaker demand.
The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange had dropped 6.77% to 3,483 ringgit ($757.83) a tonne by the midday break.
It fell as much as 8.16% earlier in the session, hitting the lowest since June 28, 2021.
“Most likely traders are reminded of Dorab Mistry’s comments on Friday, thus the bearish sentiment,” said a palm oil trader in Kuala Lumpur, adding that cargo surveyor data showing strong exports was not enough to help prop up prices.
Malaysian palm oil prices will plunge to 2,500 ringgit by the end of December, weighed down by improving production, demand destruction and a slowdown in major economies, leading analyst Dorab Mistry said on Friday.
Exports of Malaysian palm oil products for Sept. 1-25 rose 20.9% to 1,168,627 tonnes from 966,655 tonnes shipped during Aug. 1-25, cargo surveyor Intertek Testing Services said on Sunday.
Indonesia’s palm oil exports are set to jump in the second half of the year after the scrapping of export levies, but the annual total will still be lower than last year’s 33.7 million tonnes due to earlier restrictions, the Indonesian Palm Oil Association said.
Dalian’s most-active soyoil contract DBYcv1 fell 3.19%, while its palm oil contract DCPv1 dropped 6.24%. Soyoil prices on the Chicago Board of Trade BOc2 were down 1.38%.
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 Fransiska Nangoy; Editing by Subhranshu Sahu)