Palm oil swings on biofuel demand outlook and output concerns

Saturday 23 Nov 2024

(Sept 11): Palm oil fluctuated on its poor production outlook and concerns about the tropical oil’s biofuel appeal, following recent declines in petroleum prices.

Crude oil dropped 3.7% in the previous session, before partially recovering on Wednesday. The commodity, which has slipped in nine out of 12 sessions, traded below US$70 (RM302.95) a barrel for the first time in more than two years, on concerns about global demand.

Palm oil is reacting to moves in crude oil, said David Ng, a senior trader at IcebergX Sdn Bhd. Still, concerns about the pace of production in Malaysia are likely to support the market, he said.

Output in the world’s second-biggest grower rose less than 3% in August from a month earlier, the Malaysian Palm Oil Board’s (MPOB) data showed on Tuesday. That compared with a surge of 14% in July.

Prices
Palm for November delivery on Bursa Malaysia Derivatives little changed at RM3,886/tonne as of midday break; +4.4% year-to-date. Drops as much as 0.7% and gains as much as 0.3%. Soybean oil for December in Chicago rises 0.4% to 39.80c/lb; -2.1% on Tuesday. Refined palm oil for January on Dalian Commodity Exchange +0.2% to 7,858 yuan/tonne; soybean oil for January +0.1% at 7,680 yuan/tonne. Soybean oil’s discount over palm ~US$21/tonne versus average premium of ~US$215 in past year: data compiled by Bloomberg. Palm’s premium over gasoil ~US$270/tonne versus average of ~US$26 in past year: data compiled by Bloomberg.

Prices

Palm for November delivery on Bursa Malaysia Derivatives little changed at RM3,886/tonne as of midday break; +4.4% year-to-date.
- Drops as much as 0.7% and gains as much as 0.3%.
Soybean oil for December in Chicago rises 0.4% to 39.80c/lb; -2.1% on Tuesday.
Refined palm oil for January on Dalian Commodity Exchange +0.2% to 7,858 yuan/tonne; soybean oil for January +0.1% at 7,680 yuan/tonne.
Soybean oil’s discount over palm ~US$21/tonne versus average premium of ~US$215 in past year: data compiled by Bloomberg.
Palm’s premium over gasoil ~US$270/tonne versus average of ~US$26 in past year: data compiled by Bloomberg.

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