Palm slides for fourth session on weaker rival oils, crude oil

KUALA LUMPUR: Malaysian palm oil futures continued to decline for the fourth consecutive session on Wednesday, dragged down by weaker competitor oils and crude oil prices. The December December palm oil contract on the Bursa Malaysia Derivatives Exchange slipped RM25, or 0.52 percent, to RM4,785 per metric ton. Oil prices softened as Saudi Arabia initiated the resumption of crude supply through a vital pipeline in the Red Sea, and amid optimism for a diplomatic resolution to the US-Iran conflict through UN talks in New York.

Palm oil's reduced appeal as a biodiesel feedstock stems from lower crude oil futures. Dalian's most-traded soyoil contract declined 0.38 percent, while its palm oil contract slipped 1.41 percent. Soyoil prices on the Chicago Board of Trade slipped 0.82 percent. Palm oil moves in tandem with the prices of other edible oils, as it competes for market share in the global vegetable oil sector.

By September 20, the European Union had imported 2.67 million tons of soybeans for the 2026/27 season, a 14 percent decrease compared to the previous year. Palm oil imports fell 26 percent to 0.56 million tons, according to European Commission data. Indonesia anticipates a shorter rainy season than usual beginning in November, which could disrupt crop yields as farmers alter planting schedules.

Agropalma, Brazil's leading palm oil producer, projects a 20 percent increase in output for the upcoming crop cycle, following a setback caused by the El Niño weather event in 2023-24. Palm oil may fall below its current support level of RM4,799 per ton, potentially trading between RM4,732 and RM4,766, according to Reuters technical analyst Wang Tao.

Asian equities targeted a sixth consecutive day of gains, buoyed by continued demand for consumer applications in AI technology, while oil prices lagged due to reports of heightened Middle East supply.