The benchmark palm oil futures contract on Malaysia’s commodity exchange fell over 122 points or 3% during afternoon trade May 31, reaching its lowest level since October 2022, with analysts attributing the drop to sluggish demand, weakness in related vegetable oil markets and falling crude oil prices.
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The most actively traded August crude palm oil contract was down 3% to MR3,281/mt ($712.31/mt) during the mid-day session on the Bursa Malaysia Derivatives exchange May 31 after plummeting 4% to close at MR3,405/mt on May 30. “A sharp decline in crude oil prices and a persistent bearish trend in Black Sea sunflower oil prices has triggered a sell-off in related vegetable oils,” Anilkumar Bagani, research head at Mumbai-based vegetable oil brokerage Sunvin Group said, adding that accelerated soybean planting pressured the US soybean complex. Similarly, on China’s Dalian Commodity Exchange, the most active palm oil contract fell 4.7% to Yuan 6,328/mt ($878.65/mt), while the equivalent soybean oil contract fell 4% to Yuan 6,758/mt May 31. “The persistent weakness in the Chicago soybean oil is dragging prices in the palm oil market lower,” David Ng, senior trader at Malaysia-based IcebergX told S&P Global Commodity Insights. “Sentiment also battered by concerns over rising output and ...
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