KUALA LUMPUR: Malaysian palm oil futures slipped on Monday and snapped a seven-session gaining streak, pressured by demand concerns in key destinations, although a decline in production capped losses.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange slid 36 ringgit, or 0.93%, to 3,820 ringgit ($820.98) at the close, booking its first loss since Jan. 3.
The decline in production in top producers, Indonesia and Malaysia, as well as Red Sea tensions will cap losses in Malaysian palm oil futures but demand concerns from destinations like China and India are also limiting gains, said Mitesh Saiya, trading manager at Mumbai-based firm Kantilal Laxmichand & Co.
Malaysia’s crude palm oil production plunged 13.31% from November to 1.55 million tons in December, while palm oil exports declined 5.12% to 1.33 million tons, data from industry regulator the Malaysian Palm Oil Board (MPOB) showed last week.
Exports of Malaysian palm oil products during Jan. 1-15 were estimated to be down 2.6% to 604,474 tons from 620,613 tons shipped during Dec. 1-15, independent inspection company AmSpec Agri Malaysia said on Monday.
However, data from cargo surveyor Intertek Testing Services showed that exports for Jan. 1-15 rose 6.5% to 629,918 tons from 591,490 metric tons shipped during Dec. 1-15.
Dalian’s most-active soyoil contract remained unchanged, while its palm oil contract added 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices edged up on Monday as traders watched for supply disruption risks in the Middle East following strikes by US and British forces to stop Houthi militia in Yemen from attacking ships in the Red Sea.
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