VEGOILS-Palm oil set for second monthly loss on higher Indonesian supply
28.04.2023 (Nasdaq) - KUALA LUMPUR, April 28 (Reuters) - Malaysian palm oil futures were rangebound on Friday as traders factored in larger supply from top producer Indonesia, setting the contract on course for a second consecutive monthly decline.
The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange was unchanged by the midday break, hovering at its lowest since Oct. 4.
Palm is set for an 8.1% decline for the month.
The crude palm oil market is hitting a low of over six months on uncertain Indonesian policies and slack demand, said Sandeep Singh, director at The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
Bearish soy and soft oils prices, which are at par or even lower than palm oil at destination markets, also weighed on prices, he added.
"However, most seem to be factored in and the market seems to be at fair levels for buyers to start buying at every major dip," he said.
Indonesia will lower its mandatory domestic sales threshold for palm oil producers to 300,000 tonnes a month starting in May, the Trade Ministry said on Thursday, allowing more shipments of the widely used oil to leave the country.
Dalian's most-active soyoil contract DBYcv1 fell 2.2%, while its palm oil contract DCPcv1 lost 2%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.9%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may fall to 3,407 ringgit per tonne, driven by a wave C, Reuters technical analyst Wang Tao said. TECH/C
(Reporting by Mei Mei Chu; Editing by Sonia Cheema)