05/09/2024 (Reuters), Jakarta - Malaysian palm oil futures extended losses to a third straight session on Wednesday, tracking a drop in prices of rival vegetable oils and a decline in India’s palm oil imports.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 1.09% at 3,888 ringgit ($893.79) per metric ton.

“The futures is tracking external market drop on rival oils as well as taking notes on the drop of import from India due to high prices,” a Kuala Lumpu-based trader said.

The strengthened ringgit has made palm oil significantly uncompetitive, the trader added. Dalian’s most-active soyoil contract fell 0.9%, while its palm oil contract was down 1.4%. The Chicago Board of Trade dropped 0.41%.

Palm oil tracks price movements in related oils as they compete for a share in the global vegetable oils market. Malaysia’s palm oil inventories are expected to have climbed to their highest levels in six months at the end of August due to lacklustre export demand, a Reuters survey showed.

India’s palm oil imports in August fell 27% from a month ago on ample stocks and as negative margins prompted refiners to curtail purchases of the tropical oil, five dealers said on Tuesday.

Lower purchases by the world’s biggest importer of vegetable oils could lead to higher stocks in key producers Indonesia and Malaysia, which would weigh on the contract. The Malaysian ringgit, palm’s currency of trade, gained 0.34% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders. China said on Tuesday it plans to start an anti-dumping investigation into canola imports from Canada, after Ottawa moved to impose tariffs on Chinese electric vehicles, sending prices of domestic rapeseed oil futures to a one-month peak.

Oil prices fell slightly on Wednesday, hovering at their lowest levels since December after plunging more than 4% the previous day on signs of a weak global economy, lacklustre oil demand, and expectations of an end to a dispute halting Libyan exports. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

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