Palm oil ٖfell on dwindling importer demand and rising stockpiles

Analyst Report (B – Trams) : Palm oil retreated, setting the tropical oil on track for its steepest daily decline in more than two weeks, as investors fretted about dwindling importer demand and rising stockpiles in the world’s top growers. Futures fell as much as 2.8% to 4,032 ringgit a ton in Kuala Lumpur.

Palm, the world’s most consumed cooking oil, is also down 1.3% this week after several days of volatile trading amid uncertainty surrounding demand, weather risks and the pace of production in major grower Malaysia.

“The main concern is palm oil production and stockpiles which are expected to rise in October despite some impact from rains,” said Abdul Hameed, director of sales at Manzoor Trading in Pakistan. “Demand is also not picking up as many destination markets, such as India and Pakistan, have sufficient stocks.”

Buying appetite for palm oil typically wanes toward the year-end as the tropical oil tends to solidify in colder temperatures.

That means biofuel demand in Europe may decrease because of the winter, Abdul said, adding that good U.S. soybean harvesting and lack luster demand for canola are also damping market sentiment.

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Finish Soy Planting After Rains:

Trade Group Malaysian Bonds Rise on Palm Oil Gains that Taiwan Notes Advance *T*T Prices Palm for January delivery on Bursa Malaysia Derivatives -2.4% to 4,047 ringgit/ton as of midday break; -14% YTD Soybean oil for December in Chicago drops 0.3% to 72.09c/lb; -1.5% Thursday Refined palm oil for January on Dalian Commodity Exchange -2.8% to 7,938 yuan/ton while soybean oil for January-2.9% to 9,152yuan/ton Soybean oil’s premium over palm-$732/ton vs avg of-$306 in past year.