20/12/2022 (The Edge Markets) - Palm oil slipped after two days of gains, as a drop in exports from Malaysia stoked concern about weaker demand.

Malaysia’s palm oil exports fell 4.5% in the first 20 days of December from a month ago, according to Intertek Testing Services. Shipments to China tumbled by more than 60%, raising concern about the outlook for cooking oil demand, as the country’s swift abandonment of Covid Zero has seen infections explode.

The export data is bearish, though shipments to China could recover ahead of the Lunar New Year holiday, a seasonally strong period for demand, according to Sathia Varqa, owner of Palm Oil Analytics in Singapore.

He expects prices to rise in the first quarter on slower production, as well as increased use of crude palm oil for biodiesel in Indonesia. Localised floods in parts of Indonesia and Malaysia might disrupt plantation activities, he added. Benchmark palm oil futures fell as much as 2.1% in Kuala Lumpur on Tuesday.

Prices

·         Palm for March delivery on Bursa Malaysia Derivatives -1.5% to close at RM3,870/tonne; -18% YTD.

·         Soybean oil for March in Chicago -0.2% to 63.29c/lb.

·         Refined palm oil for May on Dalian Commodity Exchange -0.5% to 7,726 yuan/tonne; soybean oil for May -0.5% to 8,428 yuan/tonne.

·         Soybean oil’s premium over palm ~US$522/tonne vs average of ~US$377 in past year: data compiled by Bloomberg.

·         Palm’s discount to gasoil ~US$6/tonne vs average premium of ~US$104 in past year: data compiled by Bloomberg.

https://www.theedgemarkets.com/article/palm-oil-retreats-signs-weaker-demand-malaysian-exports