KUALA LUMPUR: Malaysian palm oil futures closed lower on Wednesday as traders booked profits after a three-day climb, with concerns about a global economic slowdown also weighing on sentiment.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange had slid 40 ringgit, or 1.03%, to 3,858 ringgit ($852.60) a tonne.
World stocks were stuck in a sea of red as market braced for an even more aggressive U.S Federal Reserve as inflation roars.
“This (U.S. inflation data) stoked fears of a quicker and higher interest rate hike to come, setting the equities into a sell-off and spilling into the commodities market,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
The ringgit, palm’s currency of trade, fell 0.4% to its lowest since 1998, making the commodity cheaper for holders of foreign currencies.
Palm oil rises over 2% as early Sept exports strengthen
Malaysia is in the peak production season and palm oil board data showed a 9.7% month-on-month rise in August output. Analysts expect production to remain strong in September before tapering off in the fourth quarter.
Dalian’s most-active soyoil contract fell 0.2%, while its palm oil contract gained 0.2%. Soyoil prices on the Chicago Board of Trade rose 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The value of Colombia’s palm oil exports may rise significantly to $800 million this year, thanks to high international prices and stable production, the palm growers association said on Tuesday.
Comments
Comments are closed.