KUALA LUMPUR: Malaysian palm oil futures declined on Wednesday, giving up earlier gains as traders awaited crucial domestic supply and demand figures for direction. The benchmark December contract on the Bursa Malaysia Derivatives Exchange fell by 0.47%, ending at 4,251 ringgit ($993.22) per metric ton.
The contract had initially gained up to 0.73% in the afternoon session before reversing. According to David Ng, a trader with Iceberg X Sdn Bhd, the market initially rallied on expectations of lower output and tighter stock levels ahead of the Malaysian Palm Oil Board’s (MPOB) upcoming report. The MPOB is set to release its September supply-demand data on Thursday.
In other markets, Dalian’s leading soyoil and palm oil contracts decreased by 1.5% and 2.05%, respectively, while soyoil prices on the Chicago Board of Trade rose 0.49%. The slight strengthening of the ringgit, Malaysia’s currency, by 0.12% against the dollar made palm oil more expensive for international buyers.
The global vegetable oils market remains under pressure, especially as crude oil prices softened, making palm oil a less appealing choice for biodiesel production. However, increased biodiesel mandates in Indonesia, the world’s largest palm oil producer, could limit supply, according to industry experts. Additionally, there are concerns that a potential delay in the European Union’s anti-deforestation laws could affect trade dynamics, as it might disadvantage companies that have already met compliance.
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