Saturday 30 Sep 2023
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KUALA LUMPUR (Nov 13): Malaysian palm oil futures extended losses into a second day on Thursday, following competing soy markets, with investors keeping a close watch on crude prices at near four-year lows.
"It's all external factors. The U.S. bean oil was down last night, and today the Dalian fell," said a trader with a foreign commodities brokerage in Malaysia.
The U.S. soyoil contract for December was nearly flat after falling to as low as 32.19 U.S. cents a pound late Wednesday. The most active May soybean oil contract on the Dalian Commodities Exchange fell 1.2 percent in late Asian trade.
The benchmark January contract on the Bursa Malaysia Derivatives Exchange had inched down 1.2 percent to 2,232 ringgit ($669) per tonne by the day's close, with prices trading between 2,219-2,245 ringgit.
Total traded volume stood at 39,596 lots of 25 tonnes, just above the usual 35,000 lots.   
Palm's support level is seen at 2,200 ringgit with a resistance of 2,300 ringgit over the next few days, the Malaysian trader said.    
India's food ministry wants to double the import tax on crude edible oils from the current 2.5 percent and raise the tax on refined oils to 15 percent, but is waiting on views from other ministries before passing the recommendation to the cabinet, the food minister told Reuters on Thursday.
A hike in import duties from the world's No.1 vegetable oil buyer could weigh on benchmark palm futures, as most of its edible oil imports are palm oil from top producers Indonesia and Malaysia.    
Investors are also keeping a close watch on crude oil's sell-off, which could lower palm's use for biodiesel blending, although some market players say biodiesel mandates in the top producing countries will help prop up demand.
"Just because crude prices drop doesn't mean biodiesel demand will stop, because there are government policies especially from Indonesia and Malaysia," the Kuala Lumpur trader said.
Brent crude oil fell to a four-year low below $80 a barrel on Thursday after Chinese data showed a further slowdown in activity in the world's biggest energy consumer and Saudi Arabia remained silent about a possible cut in production.
  Palm, soy and crude oil prices at 1021 GMT                                                                                                          
  Contract        Month    Last   Change     Low    High  Volume                                                                                      
  MY PALM OIL      NOV4       0    +0.00       0       0       0                                                                                      
  MY PALM OIL      DEC4    2223   -21.00    2208    2230    2448                                                                                      
  MY PALM OIL      JAN5    2232   -27.00    2219    2245   21178                                                                                      
  CHINA PALM OLEIN MAY5    5374   -46.00    5348    5442  985602                                                                                      
  CHINA SOYOIL     MAY5    5926   -72.00    5890    5938  361640                                                                                      
  CBOT SOY OIL     DEC4   32.21    +1.90   32.18   32.56   17115                                                                                      
  INDIA PALM OIL   NOV4  450.90    +1.90  448.10  451.90     615                                                                                      
  INDIA SOYOIL     NOV4  582.50    +3.95  579.10  582.80    3430                                                                                      
  NYMEX CRUDE      DEC4   76.78    -0.40   76.62   77.16   22971                                                                                      
  Palm oil prices in Malaysian ringgit per tonne                                                                                                      
  CBOT soy oil in U.S. cents per pound                                                                                                                
  Dalian soy oil and RBD palm olein in Chinese yuan per tonne                                                                                         
  India soy oil in Indian rupee per 10 kg                                                                                                             
  Crude in U.S. dollars per barrel                                                                                                                    
($1 = 3.336 Malaysian ringgit)    
($1 = 6.1248 Chinese yuan)
($1 = 61.57 Indian rupee)

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