Business Recorder
KUALA LUMPUR: Malaysian palm oil futures fell on Friday, pressured by concerns that a rise in output could outstrip demand owing to the ongoing Middle East war, even as official data showed inventories fell to a seven-month low in March. The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 17 ringgit, or 0.37%, at 4,626 ringgit ($1,168.18) a metric ton by the midday break. The contract has fallen 3.37% so far this week and is set for itsfirst weekly decline in six weeks. Malaysia’s palm oil stocks droppedlast month, while production increased 7.21% and exports surged 40.69%, Malaysian Palm Oil Board (MPOB) data showed. As we enter the peak production months of April, May, and June, demand destruction caused by Middle East war and higher freight costs will begin to reflect in the April 1–10 export figures, said Paramalingam Supramaniam, director at brokerage Pelindung Bestari. “If exports fail to keep pace with the seasonal increase in production, end stocks will inevitably rise again, capping any near-term recovery. Exports must remain robust but looking at the current environment, it is going to be difficult,“ he added. Cargo surveyors are expected to release their estimates of Malaysian palm oil products exports for April 1-10 later in the day. Dalian’s most-active soyoil contract rose 0.61%, while its palm oil contract added 1.12%. Soyoil prices on the Chicago Board of Trade were up 0.01%. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices climbed, driven by fresh anxiety over supplies from Saudi Arabia and as tanker traffic through the critical Strait of Hormuz remained largely frozen. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Go to News Site