JAKARTA: Malaysian palm oil futures fell on Monday, weighed down by weakness in rival vegetable oils on the Dalian Commodity Exchange and a firm ringgit.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed down 0.84% to 3,909 ringgit ($843.00) a metric ton. “Bursa Malaysia palm oil started lower because of tracking spill-over weakness from Dalian Commodity Exchange market and firm ringgit,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract declined 1.08%, while its palm oil contract rose 0.69%. Soyoil prices on the Chicago Board of Trade were down 0.81%. Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Malaysian ringgit, the contract’s currency of trade, strengthened 0.39% against the US dollar, making palm oil less attractive for foreign currency holders. Indonesia’s Trade Ministry is planning to revise the domestic market obligation rules for palm oil to potentially change the prices for the portion and types of product sold to the local market, an official said on Monday. However, market participants are waiting for further details of the revision.
“Indonesia plans to revise palm oil domestic market rules offer little cues as market been talking about it for months. Hence, need further details before can assess the impact of it,” a trader said.
Malaysian palm oil exports for July 1-25 are estimated to have risen from last month, with Cargo surveyor Societe Generale de Surveillance estimating exports at 1,193,049 metric tons from 908,517 tons during June 1-25, according to LSEG. Cargo surveyors Intertek Testing Services and Amspec Agri said exports rose 31% year-on-year.
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