Palm Oil Futures Decline Amid Market Fluctuations

JAKARTA: Malaysian palm oil futures experienced a reversal from earlier gains, mirroring movements in Dalian’s rival oils. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange decreased by 36 ringgit, equivalent to 0.9%, settling at 3,975 ringgit ($901.36) per metric ton at the session’s close. This marks the third consecutive weekly loss, reaching a 28-week low.

The futures contract registered a decline of 5.63% over the course of the week.

According to a trader based in Kuala Lumpur, the futures market appears to be consolidating, trading within a range of 4000 to 4080 ringgit, as participants await fresh market catalysts.

On the Dalian Commodity Exchange, the most actively traded soyoil contract edged down by 0.05%, while the palm oil contract saw a decrease of 0.12%. In contrast, soyoil prices on the Chicago Board of Trade (CBOT) experienced an increase of 0.67%.

Palm oil prices often correlate with the price fluctuations of competing edible oils as they vie for market share in the global vegetable oils sector.

Palm oil prices have declined for the fourth consecutive session, influenced by increased production levels.

Official data from the Malaysian Palm Oil Board, released on Tuesday, indicated that Malaysia has kept its May export tax for crude palm oil at 10% while reducing its reference price.

Data from cargo surveyor Intertek Testing Services and independent inspection firm AmSpec Agri Malaysia suggest that exports of Malaysian palm oil products for the period of April 1-15 have increased by an estimated 13.6% to 17% compared to the previous month.

The Malaysian ringgit, the currency in which the contract is denominated, remained relatively stable against the U.S. dollar. A weaker ringgit typically enhances the contract’s appeal to holders of foreign currencies.