VEGOILS-Palm declines from one-week peak as muted April exports, higher output weigh
12/04/2023 (Nasdaq) - Malaysian palm oil futures extended early losses on Wednesday after closing at a one-week peak in the previous session, with weak April exports and forecasts of higher output weighing on market sentiment.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange slid 58 ringgit, or 1.49%, to 3,830 ringgit ($867.89) a tonne by the midday break after two straight sessions of gains.
Prices slumped after the Southern Peninsular Palm Oil Millers Association (SPPOMA) reported a 35% monthly rise in production during the first 10 days of April, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
"Demand is another worry in April, with prices of competing vegetable oils like sunflower oil and rapeseed oil narrowing versus palm," he added.
Exports of Malaysian palm oil products for April 1-10 fell 16.2% to 408,663 tonnes from 487,530 tonnes shipped during the same period inMarch, cargo surveyor Societe Generale de Surveillance said on Tuesday.
In related oils, soybean production in Argentina will fall to a 23-year low, smaller than previously thought, as a crop-wasting drought decimated fields in the key South American producer, the U.S. government said.
Soyoil prices on the Chicago Board of Trade BOcv1 fell 0.5%. Dalian's most-active soyoil contract DBYcv1slipped 0.2%, while its palm oil contract DCPcv1was down 0.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
"Overall prices will remain stable with Eid holidays coming and mills will shut down for a longer period due to the holidays," Paramalingam said.
($1 = 4.4130 ringgit)
Source: Reuters