MUMBAI, 7 Aug (Commoditiescontrol): Malaysian crude palm oil (CPO) futures extended their losing streak for a third consecutive session on Wednesday, pressured by declines in rival contracts on the Dalian and Chicago exchanges. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed 9 ringgit, or 0.24%, lower at 3,696 ringgit ($822.80) per metric ton. Earlier in the session, the contract had seen a brief gain of 0.51%.
The market initially found some support from a weaker ringgit, which provided a double-digit recovery earlier in the day. However, the downward trend resumed as traders reacted to fresh data from China, a key buyer, which showed a slowdown in exports alongside a surge in imports for the previous month.
The ringgit, the currency used for palm oil trade, weakened by 0.49% against the US dollar, making palm oil more affordable for buyers using foreign currencies. Despite this, the impact was overshadowed by the broader weakness in global edible oil markets.
On the Dalian Commodity Exchange, the most-active soyoil contract dropped 1.07%, while the palm oil contract fell 1.74%. In the US, soyoil prices on the Chicago Board of Trade declined by 0.33%. Since palm oil often tracks the price movements of other edible oils, these declines added further pressure on the Malaysian market.
Brent crude oil futures, however, gained 1.14% to reach $77.35 a barrel by 1007 GMT, which could make palm oil a more attractive feedstock for biodiesel production. Meanwhile, palm oil inventories in Malaysia are expected to decrease in July after rising for three straight months. The Malaysian Palm Oil Board is set to release its monthly data on August 12.
Additionally, cargo surveyor data suggests that Malaysian palm oil shipments likely surged by 22.8% to 30.91% from June, following the resolution of shipment issues. In Indonesia, the top palm oil producer, the government is reviewing domestic market obligation rules, adding another layer of uncertainty to the market.
Amid this ongoing volatility, palm oil markets are hovering near their lowest levels in seven months, fueled by concerns over a potential recession in the US.
(By Commoditiescontrol Bureau; +91 98201 30172)
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