Palm closes lower on rising stockpile concerns

The Malaysian ringgit palm oil price dipped on Tuesday due to worries about escalating September stockpiles and lower crude oil rates. The December delivery palm oil contract on Bursa Malaysia Derivatives Exchange fell 18 ringgit, or 0.39%, to 4,560 ringgit per metric ton by the close. David Ng, a prop trader at Iceberg X Sdn Bhd, noted that expectations of high September inventories are preventing price gains.

Malaysia's palm oil stocks are projected to reach a record high in September, surpassing the December 2018 peak, as production surged to record levels while export demand remained sluggish, according to a Reuters survey. Crude oil prices dropped more than 2% as Middle Eastern exports surged and a G7 emergency diesel and crude stockpile release eased supply worries, though ongoing regional security risks limited further declines.

Palm oil becomes less appealing as biodiesel feedstock when crude oil futures weaken. Soyoil prices on the Chicago Board of Trade declined 0.58%. Dalian Commodity Exchange is on holiday and reopens October 8. Palm oil mirrors the price movement of other edible oils, competing for a piece of the global vegetable oil market. The Malaysian ringgit, which is the trading currency for palm oil, rose 0.07% against the dollar, making the commodity slightly pricier for foreign buyers.

In September, Indian sunflower oil imports hit their lowest level in over four years as the Ukraine war disrupted shipments, leading refiners to purchase palm oil at their highest level in seven months, according to five traders.