Malaysian Palm Oil Futures Slumps To One-Month Low On Weaknewss In Rival Edible Oils

palm oil market


KUALA LUMPUR:  Due to worries about the banking crisis in the United States and weakness in other edible oils, Malaysian palm oil futures fell on Thursday to their lowest level in a month.

On the Bursa Malaysia Derivatives Exchange, the benchmark palm oil contract for delivery in June decreased by 32 ringgit, or 0.81 percent, to 3,935 ringgit ($874.44) per tonne.

Palm closed at its lowest level since February 15 after falling for the fourth time in five sessions.

Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics, stated, “Futures was reeling from the impact of banking sector crisis rocking the wider financial markets.”

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As Credit Suisse became the latest focus of fears of a banking crisis, Asian stocks fell and investors turned to the safety of gold, bonds, and dollars, putting markets at risk.

According to data released of Malaysian palm oil futures on Wednesday by cargo surveyors, Malaysia’s exports for the one to fifteenth of March increased by between 55% and 72% from the same period in February as shipments to India increased ahead of the Muslim festival of Eid. Palm closes at a level that is close to a one-month low due to concerns about the economy and weaker rival oils.

The trade minister of Indonesia said on Wednesday that palm oil producers sold 360,150 tonnes of cheap cooking oil to the domestic market in February, falling short of a government goal to ensure supply to local consumers.

Varqa stated that, despite solid fundamentals, the macro outlook has turned sharply negative, and that uncertainty regarding El Nino weather conditions is also likely.

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The El Nino weather pattern is expected to develop in the second half of the year, posing a threat to supplies and heightening concerns about food inflation, and it is anticipated that Asian cereal and oilseed crops will face hot, dry conditions.

The most active soyoil contract in Dalian was down 2.8%, while the palm oil contract was down 1.1%. On the Chicago Board of Trade, soyoil prices were down 0.4 percent.