JAKARTA/KUALA LUMPUR: Malaysian palm oil futures extended losses to the second straight session on Wednesday and closed at their lowest in more than two weeks, weighed down by weaker rival edible oil prices and rising May-end stocks.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange lost 25 ringgit, or 0.65%, to 3,839 ringgit ($906.49) a metric ton at closing, its lowest closing price since May 26.
“Slow growth in export demand amidst high stock levels may remain, pressuring prices and dampening market sentiment,” a Kuala Lumpur-based trader said.
Malaysia’s palm oil stocks jumped to their highest level in eight months in May as a surge in production and imports countered exports, which hit their highest in six months, data from the Malaysia Palm Oil Board (MPOB) showed. Cargo surveyors estimated exports of Malaysian palm oil products during June 1-10 to have risen between 8.1% and 26.4% month-on-month.
European Union palm oil imports for the 2024-25 season that began in July dropped 19% to 2.69 million tons by June 8, the European Commission data showed.
Demand for palm oil from India and China is expected to increase in the coming months as recent price corrections provide attractive entry points for the big buyers, an industry expert said.
Dalian’s most-active soyoil contract fell 0.93%, while its palm oil contract shed 2.33%. Soyoil on the Chicago Board of Trade (CBOT) lost 0.19%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. The ringgit, palm’s currency of trade, weakened 0.05% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies. Palm oil may test a resistance level of 3,889 ringgit per metric ton, a break above which could lead to a gain of up to 3,925 ringgit, Reuters technical analyst Wang Tao said.
