MUMBAI, 9 Sep (Commoditiescontrol): Malaysian crude palm oil (CPO) futures ended lower on Monday, pressured by a sell-off in rival soyoil, as traders anticipate crucial data on output and inventories from the Malaysian Palm Oil Board (MPOB). The benchmark CPO contract for November delivery on the Bursa Malaysia Derivatives Exchange dropped by 3 ringgit, or 0.08%, to close at 3,895 ringgit ($891.71) per metric ton.
Market participants are closely watching for the MPOB’s monthly data, scheduled for release on Tuesday, which is expected to show a six-month high in palm oil inventories due to sluggish export demand. A Reuters survey predicts palm oil stockpiles in Malaysia surged at the end of August. Amspec Agri estimates that Malaysia’s palm oil exports for August totaled around 1.38 million tons.
Adding to the bearish sentiment, cargo surveyor Intertek Testing Services reported that Malaysia’s palm oil product exports dropped 9.9% in August, totaling 1.45 million tons, compared to 1.60 million tons shipped in July.
In the international arena, Indonesia, the world’s largest palm oil producer, is considering lowering export duties to boost its competitiveness in the global market and increase farmer incomes.
Meanwhile, oil futures jumped about 1% on Monday, as a potential hurricane approaching the U.S. Gulf Coast sparked concerns of supply disruptions. The recovery in oil prices followed a sharp decline the previous week. Stronger crude oil prices tend to support palm oil as it becomes a more attractive option for biodiesel feedstock.
On the technical front, palm oil prices are likely to retest support at 3,886 ringgit per ton, with a further drop to 3,856 ringgit possible if the support level is breached, according to analysts.
(By Commoditiescontrol Bureau; +91 98201 30172)
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