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Palm oil falls October 2015




  • Malaysian palm oil futures fell in late trade on Friday, although largely remaining rangebound, tracking a volatile ringgit and depressed by a bearish export outlook. The benchmark December palm oil contract on the Bursa Malaysia Derivatives Exchange fell 0.6 percent to close at 2,305 ringgit ($552.76) a tonne.

    Palm prices have been tracking a volatile ringgit for the past two weeks, seeing a near 15-month high of 2,444 ringgit before hitting a three-week low of 2,216 ringgit last week. Bearish export data released by cargo surveyors on Thursday revealed a nearly 9 percent drop in exports in the first 15 days of October, compared with the same period last month.

    A palm oil trader based in Kuala Lumpur said the key points to watch were the exchange rate and demand from traditional markets such as India and China. “We’re seeing wide fluctuations in the ringgit… Exports to India won’t be continuing because their festival demand is being covered to a large extent,” he said, referring to the Diwali celebrations in November.

    Traded volume stood at 46,660 lots of 25 tonnes each, above the average 35,000 lots usually traded in a day. “We’re still not sure how exports will look like going forward. We are not optimistic but this will be balanced out by lean production in the coming months,” said another trader. Palm oil is expected to rise to 2,338 ringgit per tonne as it has broken a resistance at 2,309 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals. In other vegetable oil markets, the US December soyoil contract fell slightly by 0.1 percent, while the January soybean oil contract on the Dalian Commodity Exchange lost 0.2 percent.

    Copyright Reuters, 2015

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