Palm slides on lower Indonesian export costs, weak crude, rising stockpiles

Malaysian palm oil futures plunged on Monday due to lower export costs from Indonesia, weaker crude oil prices, and fears of expanding stockpiles. The January palm oil contract on Bursa Malaysia Derivatives Exchange fell 0.66% to 4,650 ringgit ($1,144.19) per metric ton. This decline came after Indonesia reduced its November crude palm oil reference price and export levy, prompting Malaysian palm oil prices to drop to stay competitive.

The market opened November trading on a downbeat note, according to a trader in Kuala Lumpur. The palm oil contract also slid due to weak energy prices and uncertainty over a potential waiver of the Malaysian palm oil export tax, said Anilkumar Bagani, head of research at Sunvin Group, a vegetable oil broker based in Mumbai. "Without a bullish narrative, traders are once again focusing on supply and demand dynamics, where supply continues to outweigh demand," he added.

Cargo surveyors estimated that Malaysian palm oil product exports in October surged between 45.4% and 73.5% compared to the previous month. Meanwhile, crude oil prices dropped nearly 4% as discussions between Iranian and Qatari officials aimed at ending tensions between Iran and the US and Israel. This eased concerns over potential Middle East supply disruptions.

Dalian's most-active soyoil contract rose 0.54%, while its palm oil contract gained 0.92%. In contrast, soyoil prices on the Chicago Board of Trade fell 0.44%. Palm oil prices are closely linked to those of other edible oils, as they vie for a larger share of the global vegetable oils market. The Indonesian currency, the ringgit, weakened 0.35% against the US dollar, making the commodity slightly cheaper for buyers using foreign currencies.