Malaysian palm oil futures declined for the second consecutive session on Tuesday, weighed down by weakness in rival edible oils and falling crude oil prices. However, strong export data helped cap further losses.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange dropped by 1.04%, closing at 4,268 ringgit ($993.26) per metric ton, marking a total loss of 1.89% over two sessions.
David Ng, a proprietary trader at Iceberg X Sdn Bhd, noted that overnight declines in Chicago soyoil and lower prices for Dalian palm olein added pressure on the market. Additionally, the weakness in crude oil prices contributed to the drag on palm oil prices.
Dalian’s most-active soyoil contract fell by 1.52%, while its palm oil contract dropped 2.2%. Soyoil prices on the Chicago Board of Trade also decreased by 0.62%, continuing a broader weakness in U.S. soybean contracts.
Palm oil tends to follow the price trends of competing edible oils due to their shared stake in the global vegetable oils market.
Despite the downturn, robust export performance kept the losses in check. Cargo surveyors reported that Malaysian palm oil exports rose by 14% to 15.6% from October 1 to 15 compared to the same period last month.
Meanwhile, crude oil prices plunged over 4%, nearing a two-week low due to a weakening demand outlook and reports that Israel may refrain from targeting Iranian oil infrastructure, easing fears of supply disruptions. Weaker crude oil futures make palm oil a less attractive biodiesel feedstock option.
The ringgit, palm oil’s trading currency, weakened by 0.37% against the U.S. dollar, making the commodity cheaper for foreign buyers.
