Malaysian palm oil futures fell on Thursday in its third straight session of declines, tracking weakness in related oils on the US Chicago Board of Trade and China's Dalian Commodity Exchange. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.6 percent at 2,404 ringgit ($621.83) a tonne at the close, after touching 2,399 ringgit during the session, its lowest since March 13.
Palm prices have declined 6.1 percent so far for this month and nearly 4 percent so far in the first quarter of the year. Prices could fall further this year as production is expected to rise after a dry weather El Nino phenomenon and as young trees come to maturity and increase harvested areas. Trading volumes stood at 34,356 lots of 25 tonnes each at the end of the trading day.
"External markets are weak today, led by the Dalian, but an easing ringgit capped some of palm's losses," said a futures trader based in Kuala Lumpur. The ringgit, palm's currency of trade, was down 0.1 percent at 3.8660 per dollar on Thursday evening, after rising to its highest in nearly two years in the previous session.
Weakness in the ringgit usually supports palm oil prices by making it more affordable for holders of foreign currencies. In related oils, the Chicago Board of Trade's May soyabean oil contract fell 0.3 percent, while the May soyabean oil on China's Dalian Commodity Exchange slid 1.3 percent. The Dalian May palm oil contract was down 1.1 percent.
Palm oil prices are affected by movements in rival edible oils as they compete in the global vegetable oils market. Palm oil may drop to 2,150 ringgit per tonne in three months, said Reuters market analyst for commodities and energy technicals Wang Tao.
Comments
Comments are closed.