The Edge Markets (14/12/2017) - KUALA LUMPUR (Dec 14): Malaysian palm oil futures hit a 16-month low on Thursday, weighed down by low demand and high stockpiles, as well as weakness in edible oils on China's Dalian Commodity Exchange.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange dropped as much as 1.6% to its lowest since Aug 8, 2016, at 2,418 ringgit, before settling down 0.2% at 2,452 ringgit a tonne at the close of trade.

Palm oil has been on a downward trend recently, shedding 5.8% so far this month, after declining 7.5% in November. It has dropped 1.1% so far this week in what could be its seventh straight weekly fall.

Trading volumes stood at 72,478 lots of 25 tonnes each on Thursday evening.

"Dalian is down a lot. As palm is weighed down by bumper stocks and slow demand, we drop with a bit of weakness externally," said a Kuala Lumpur-based trader, referring to related edible oils on the Dalian Commodity Exchange.

Palm oil prices are affected by other edible oils, as they compete for a share in the global vegetable oils market.

The January soybean oil contract on the Dalian Commodity Exchange was down 1.7%, while the Dalian January palm olein contract dropped 1.9%.

In Malaysia, stocks at the end of November increased to 2.56 million tonnes, the highest since late 2015, while data from cargo surveyors showed exports in the first 10 days of December fell 16%-22% from a month earlier.

Palm oil demand usually weakens at the end of the year, as it solidifies in cold temperatures, leading buyers such as China and Europe in the northern hemisphere to reduce purchases. 

In other related oils, the January soybean oil contract on the Chicago Board of Trade fell 0.5%.

 Palm, soy and crude oil prices at 1056 GMT

 Contract                      Month    Last   Change     Low   High   Volume

 MY PALM OIL               DEC7    2320      -9.00      2300    2320     170

 MY PALM OIL               JAN8     2408      -4.00      2375    2413    1553

 MY PALM OIL               FEB8     2450      -6.00      2418    2455    23580

 CHINA PALM OLEIN   MAY8    5218    -106.00   5208    5324     417452

 CHINA SOYOIL            MAY8    5806     -88.00    5794     5896    337080

 CBOT SOY OIL           JAN8      33.05    +0.00     32.91    33.26     6749

 INDIA PALM OIL         DEC7     559.70    -0.70    554.10    561.5     662

 INDIA SOYOIL            DEC7    713.95     -3.55     712.5    715.8    3320

 NYMEX CRUDE         JAN8      56.54      -0.06     56.48    56.93    72848

  Palm oil prices in Malaysian ringgit per tonne

  CBOT soy oil in U.S. cents per pound

  Dalian soy oil and RBD palm olein in Chinese yuan per tonne

  India soy oil in Indian rupee per 10 kg

  Crude in U.S. dollars per barrel

(US$1 = 4.0760 ringgit)

(US$1 = 64.2925 Indian rupees)

(US$1 = 6.6085 Chinese yuan)