Malaysian palm oil price slides over 2% on expectations of rising output
19.09.2018 (The Star Online) - KUALA LUMPUR: Malaysian palm oil futures fell more than 2 percent on Tuesday evening to a one-month low on expectations of rising production.
Futures were also under pressure due to the Chinese-U.S. trade dispute and weakness in related edible oils, traders said.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 2.2 percent at 2,198 ringgit ($530.79) a tonne at the end of the trading day.
The contract touched 2,195 ringgit a tonne during the session, the lowest since Aug. 15.
Trading volumes stood at 75,361 lots of 25 tonnes each at noon.
"Production seems to be coming in," said a Kuala Lumpur based futures trader, adding that the U.S.-China trade row also weighed.
U.S. President Donald Trump imposed 10 percent tariffs on about $200 billion worth of Chinese imports and said that if China took retaliatory action against U.S. farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."
China's commerce minister said U.S. unilateralism and protectionism would hurt U.S. and Chinese interests, and the global economy.
Weakness in related oils on China's Dalian Commodity Exchange contributed to palm's weaker performance, said traders.
Palm oil prices are impacted by movements of 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 dropped 0.5 percent, and the Dalian January palm oil contract was 1.6 percent lower.
Meanwhile, the Chicago September soybean oil contract fell 0.8 percent.
Palm oil may fall to 2,197 ringgit as it has broken a support at 2,227 ringgit per tonne, said Wang Tao, a Reuters market analyst for commodities and energy technicals. - Reuters