VEGOILS-Palm snaps three-day rally on demand worries
04/11/2022 (Hellenic Shipping News) - Malaysian palm oil futures on Thursday reversed early gains to snap a three-day rally after hitting a near 12-week peak, as high prices stoked demand concerns.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange fell 62 ringgit, or 1.41%, to 4,336 ringgit ($914.29) a tonne.
Palm fell on a combination of profit taking, lack of demand at current lofty prices and worries of Indonesian stocks entering Malaysian shores, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Indonesia’s crude palm oil output is seen at 48.23 million tonnes this year and exports of palm oil products are estimated at 23.95 million tonnes, a presentation by the chairman of the country’s palm oil fund agency showed.
Coordinating Minister for Economic Affairs Airlangga Hartarto told an industry conference that stronger prices of crude oil had made a higher mix of bio-content in fuel increasingly feasible.
The contract had earlier jumped 2.3% on the back of bullish global vegetable oil markets, as Chicago soybean rose overnight on optimism about demand from China.
Meanwhile, Russia said on Wednesday it would resume its participation in a deal freeing up grain exports from Ukraine, reversing a move that world leaders warned would increase hunger globally.
Dalian’s most-active soyoil contract rose 1.3%, while its palm oil contract gained 0.9%. Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.7%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Vinay Dwivedi)