MUMBAI: Malaysian palm oil futures fell for the third straight day on Wednesday to near their lowest level in more than two weeks on higher stocks and concerns over demand from leading buyer China as it struggles with rising COVID-19 cases.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed down 42 ringgit, or 1.03%, to 4,024 ringgit ($886.34) a tonne.
Malaysia’s palm oil stocks at the end of October expanded for a fifth month to a three-year high as production improved, data from the nation’s palm oil board showed on Friday.
“The likely extension to Black Sea grains corridor and concerns over demand from China were weighing on prices,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
China reported 20,199 new COVID-19 infections for Nov. 15, of which 1,623 were symptomatic and 18,576 were asymptomatic.
Exports from Malaysia, the world’s second-largest producer, rose between 10.7% and 12.7% in the Nov. 1-15 period, compared to the same weeks in October, cargo surveyors data showed.
The market has been struggling to adjust with volatile Malaysian ringgit and uncertainty over vegetable oil supplies because of La Nina and sunflower oil shipments from Black Sea region, said a Mumbai-based trader with a global trade house.
The ringgit, palm’s currency of trade, eased against the dollar, making the commodity more cheaper for holders of other currencies.
Disruptions to palm oil supplies due to tropical storms in top producers Indonesia and Malaysia are expected to continue into the first quarter of 2023, keeping prices strong, the Malaysian Palm Oil Board said on Monday.
Soyoil prices on the Chicago Board of Trade were down 0.42%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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