VEGOILS-Palm oil ends 5% lower as Indonesia ease domestic sales rule
02/08/2022 (Hellenic Shipping News) - Malaysian palm oil futures slumped more than 5% on Monday, snapping a four-session rally as as larger rival Indonesia relaxed its quota for export shipments.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 216 ringgit, or 5.04%, to 4,073 ringgit ($915.08) a tonne.
The contract surged 8.4% last week to a more than three- week high.
Top producer Indonesia will retain its domestic sales rule for palm oil to keep local cooking oil prices affordable, a senior official told Reuters.
But the government from Monday will allow exporters to ship nine times the amount sold locally under the rule, up from seven times previously, Septian Hario Seto, a deputy coordinating minister for maritime and investment affairs, said in an interview.
Palm oil is also weighed down by rumours that Jakarta will lower palm oil reference price for August, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for July rose between 0.8% and 4% from the same week June, according to cargo surveyors’ data.
Dalian’s most-active soyoil contract DBYcv1rose 0.04%, while its palm oil contract DCPcv1 eased 0.5%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices dropped as weak manufacturing data from China and Japan for July weighed on the outlook for demand, making palm a less attractive option for biodiesel feedstock. O/R
Source: Reuters (Reporting by Mei Mei Chu; Editing by Shounak Dasgupta, Rashmi Aich, and Louise Heavens)