Thursday , June 1 2023

Malaysian price of palm oil falls below 2,000 ringgit first time in 3 years – Business Nevs


KUALA LUMPUR: Malaysia's futures of palm oil fell below 2,000 yr for the first time in three years on Wednesday, cutting back on the loss of associated edible oil at the Chinese Dalian Commodity Exchange and lower than the estimated stock levels at the end of the year.

The contract on palm oil for delivery in January to Bursa, the Malaysian derivatives market, closed 1.7 percent to 1,973 rings ($ 470.38) tonnes, the seventh consecutive day of losses.
Earlier it fell as much as 2.1 percent to 1,965 rings, the weakest level since August 2015.

The trading volume was 55,797 lots at 25 tonnes on Wednesday.

"Yesterday, the power of the oil has come a long way … Dalian is also sharply, all this is not good for the palm market," said a retailer in Kuala Lumpur.

He said prices could continue to fall because Malaysia, the world's second-largest producer and exporter, could increase supplies from the current levels.

Official data from the Malaysian Palm Oil Board on Monday showed that warehouses grew 7.6 percent to 2.72 million tons at the end of October, while production increased by 6 percent to 1.96 million tons.

The trader said that the revision of the lead analyst's forecast for stocks in Malaysia in December also contributed to the fall of the palm.

It is expected that Malaysia's palm-sized shares will increase to 3.5 million tonnes at the end of December, said Dorab Mistri at a conference in China on Wednesday. He also raised his forecasts for the production of palm oil from 2018 to 41 million tons with 38.5 million tons.

Mistri previously predicted Malaysian stocks will end this year between 3 and 3 million tons.

In other related edible oils, the agreement on soybean oil from Chicago in December was down by 0.2 percent, while the soybean oil deal fell 1.6 percent in January in the Dalian commodity market.

In the meantime, the palm contract in January fell by 2.2 percent.

Prices of palm oil affect the movements of other edible oils while competing for participation in the global vegetable market.

Palm oil is expected to support 1.996 ringgit per tonne and fall in the range of 1.933-1.972 ringgit, according to Reuters analyst for commodity and energy engineering Vang Tao. – Reuters

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