JAKARTA: Malaysian palm oil futures extended declines to a third straight session on Tuesday, weighed down by weakness in rival vegetable oils in the Dalian and Chicago futures markets.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 25 ringgit, or 0.65%, to 3,799 ringgit ($815.06) during the midday break.
“Emergence of bargain buyers brought prices to cover opening gap and surged to high, although failed to sustain amid continuing weakness in rival oils,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract declined 0.30%, while its palm oil contract fell 0.75%. Soyoil prices on the Chicago Board of Trade were down 0.23%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Malaysian palm oil inventories at the end of November were seen falling for the first month since April, as a seasonal output decline was expected to start while exports continued to rise, a Reuters survey showed.
Palm oil on the European vegetable oils market dropped on Monday, following lower Malaysian palm oil futures. Asking prices for palm oil were between $2.50 a metric ton higher and $12.50 a ton lower. India’s palm oil imports in November jumped more than a fifth from the previous month as refiners favoured the tropical oil due to steep discounts compared with rival soyoil and sunflower oil.
Exports of Malaysian palm oil products in November were estimated to be up between 2% and 11% from the previous month, data from surveyors Intertek Testing Services and AmSpec Agri Malaysia showed. The Malaysian ringgit, palm’s currency of trade, fell 0.13% against the dollar.
A stronger ringgit makes palm oil less attractive for foreign currency holders. Palm oil may bounce into a range of 3,860 ringgit to 3,882 ringgit per ton, as it is stabilising around the support of 3,825 ringgit, Reuters technical analyst Wang Tao said.
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