Palm extends losses on expectations of record October inventories
KUALA LUMPUR: Malaysian palm oil futures slipped more than 1% to hit mid-June lows on Wednesday, as expectations of record-high stockpiles and weaker Dalian palm olein weighed on prices. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 55 ringgit, or 1.21%, to 4,496 ringgit ($1,103.31) a metric ton by the midday break, extending losses to a…
Malaysian palm oil futures experienced a decline, slipping over 1% and reaching a six-month low on Wednesday. The benchmark palm oil contract for January delivery on Bursa Malaysia Derivatives Exchange fell 55 ringgit, or 1.21%, to 4,496 ringgit ($1,103.31) per metric ton. This loss marked the third consecutive session of declines.
The bearish market sentiment was fueled by surveys estimating palm oil end-stocks may have hit a record high last month, up 6.8% from September's record 3.51 million tons to 3.75 million tons. The expectation of record-high inventories added to the negative outlook. Slipping Dalian palm olein prices, partly due to a decline in crude palm oil futures, further contributed to the downward pressure.
The Chicago Board of Trade's soyoil contract also declined by 1.6%, while its palm oil contract dropped 3.21%. Palm oil prices closely follow those of other edible oils due to competition for a share of the global vegetable oils market. Crude oil prices experienced a dip in early trade as investors awaited the US midterm election results and their potential impact on Middle East peace talks.
Additionally, weaker crude oil futures made palm a less appealing option for biodiesel feedstock. The Malaysian ringgit, palm's trade currency, strengthened by 0.12% against the dollar, increasing the cost for foreign buyers.
Written by urgent.news from Business Recorder's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
