Malaysian palm ends at over three-week low on slow demand, higher output expectations
RBD Palm Oil
Malaysia
Published May 24, 2023
Tridge summary
Malaysian palm oil futures fell on Tuesday for a second session, hitting their lowest closing in over three weeks, as slower demand and expectations of higher production weighed on the market. The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slipped 47 ringgit, or 1.37%, to 3,381 ringgit ($762.34) a tonne, closing at its lowest since April 28. The contract had risen 1.17% during early trade.
Original content
A lack of follow-up buying from destination markets and some washouts of palm oil by China put a break on the upward momentum, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group. “Palm oil is now seen giving up its tighter spread over soft oils, but it seems destination markets are not in a hurry and waiting for a further widening of palm oil discount over competition,” Bagani added. A recovery in Malaysia’s production is also adding pressure to the market, with investors awaiting industry estimates to determine the extent of output growth, he said. Brokerage UOB KayHian said crude palm oil prices could resume an uptrend once the market realises that palm oil supplies would be tight going into the second half of the year and even into 2024. “Based on our recent ground checks, oil palm trees are ‘very sick’ after three La Nina events, having been under-fertilised for the last 3-4 years and subjected to poor agromanagement,” UOB KayHian said in a ...
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