JAKARTA: Malaysian palm oil futures are down more than 8% as they hit their lowest in 15 months, after a leading industry analyst warned that prices would plunge by more than 30% by the end of this year due to ample supply and weaker demand.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange had dropped 6.77% to RM3,483 (US$757.83) a tonne by the midday break yesterday.
It fell as much as 8.16% earlier in the session, hitting the lowest since June 28, 2021.
“Most likely traders are reminded of Dorab Mistry’s comments on Friday, thus the bearish sentiment,” said a palm oil trader in Kuala Lumpur, adding that cargo surveyor supply data showing strong exports demand was not enough to help prop up prices of palm oil.
Malaysian palm oil prices will plunge to RM2,500 by the end of December, weighed down by improving production, demand destruction and a slowdown in major economies, leading analyst Dorab Mistry said.
Exports of Malaysian palm oil products for Sept 1-Aug 25 rose 20.9% to 1,168,627 tonnes from 966,655 tonnes during Aug 1-Aug 25, cargo surveyor Intertek Testing Services said.
Indonesia’s palm oil exports are set to jump in the second half of the year after the scrapping of export levies, but the annual total will still be lower than last year’s 33.7 million tonnes due to earlier restrictions, the Indonesian palm Oil Association said.
Dalian’s most-active soyoil contract fell 3.19%, while its palm oil contract dropped 6.24%.
Soyoil prices on the Chicago Board of Trade were down 1.38%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. — Reuters