Key Takeaways
- Malaysian palm oil futures fell 0.06% to 4,766 ringgit per metric ton.
- Weakness in Chicago soyoil and elevated stockpiles weighed on palm oil prices.
- Market speculation around export tax waiver on crude palm oil also pressured prices.
Malaysian palm oil futures declined by 0.06% to close at 4,766 ringgit ($1,168.14) per metric ton on Monday, influenced by the weakening of Chicago soyoil and elevated stockpiles, according to a trader based in Kuala Lumpur.
The performance of Dalian’s soyoil and palm oil contracts, which rose 0.4% and 0.58% respectively, and the decline of Chicago soyoil by 0.09%, contributed to the cautious trading environment.
Another trader noted that the market was also pressured by speculation that Malaysia might waive export taxes on crude palm oil to boost shipments and reduce high stockpiles.
Government data showed that Malaysia’s agricultural exports fell 5.7% in September, with palm oil and palm oil-based products experiencing a decline in shipments.
In Indonesia’s West Kalimantan province, palm oil mills reduced the processing of fresh fruit bunches in September due to lower river levels that disrupted transportation.
Palm oil prices may find support at 4,799 to 4,820 ringgit per metric ton, as a technical analyst from Reuters predicted after the contract broke a resistance at 4,766 ringgit.
The decline in palm oil prices is also linked to the weakening of crude oil futures, which may make palm oil less attractive as a biodiesel feedstock, given the recent waiver of sanctions and tariffs on Russia by US President Donald Trump.
The global vegetable oils market remains competitive, with palm oil facing pressure from stronger edible oils on the Dalian exchange.
