Malaysian Palm Oil
Weak April Exports Palm Oil and expectations of higher output weighed on the market sentiment, causing Malaysian palm oil futures to decline on Wednesday to their lowest closing in 12 days.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed down 113 ringgit, or 2.91%, to 3,775 ringgit ($856.01) per tonne, marking its biggest daily loss since March 22.
According to Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, prices plummeted after the Southern Peninsular Palm Oil Millers Association (SPPOMA) reported a 35% monthly increase in production during the first 10 days of April. He added that “Demand is another worry in April, with the prices of competing vegetable oils like sunflower oil and rapeseed oil narrowing versus palm.”
According to cargo surveyor Societe Generale de Surveillance on Tuesday, exports of Malaysian palm oil products for the period of April 1–10 decreased 16.2% to 408,663 tonnes from 487,530 tonnes shipped during the same period in March.
Effects Of Other Oils On Palm Oil
Due to their competition for market share in the world's vegetable oil markets, price changes in related oils have an impact on palm oil prices.
A crop-wasting drought decimated fields in the major South American producer, Argentina, causing soybean production to fall to a 23-year low and be less than previously estimated, the US government said. On the
Chicago Board of Trade, soy oil prices decreased by 1.1%. The most active soy oil contract in Dalian increased by 0.2%, while the palm oil contract decreased by 0.2%. With Eid approaching and mills closing for a longer period of time due to the holidays, according to Paramalingam, prices will generally stay stable.
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