Mumbai, June 25 (Commodities Control): Malaysian palm oil futures experienced a significant decline for the third consecutive day, reaching a one-month low on Tuesday. The benchmark September contract on the Bursa Malaysia Derivatives Exchange fell to 3,861 ringgit ($820.44) per metric ton, its lowest point since May 27.
Low demand from major importers like China and India has put downward pressure on prices. In India, sunflower oil has become a more attractive option due to competitive pricing from Russia and Ukraine.
Concerns about increasing stock levels in Malaysia, a major palm oil producer, have contributed to the negative market sentiment.
The narrowing price difference between palm oil and soyoil has further diminished palm oil's appeal.
Fitch Ratings anticipates a weakening of palm oil prices in the second half of the year due to higher global vegetable oil production driven by improved rainfall from La Nina.
Weaker crude oil prices have made palm oil less attractive as a biodiesel feedstock.
Palm oil prices are expected to continue declining, potentially reaching the 3,811-3,843 ringgit range as support levels break down.
The palm oil market faces a challenging outlook due to a combination of weak demand, rising stockpiles, and a potential increase in global vegetable oil supply. These factors, along with weaker crude oil prices, have contributed to the recent decline in palm oil futures and may continue to put downward pressure on prices in the coming months.
Global Futures Palm oil and Soy Oil
(By Commoditiescontrol Bureau; +91-9820130172)
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