Mumbai, 04 Dec (Commoditiescontrol): Malaysian crude palm oil (CPO) futures declined on Wednesday, driven by lower prices in competing edible oils and a stronger Malaysian ringgit.
The benchmark February CPO contract on the Bursa Malaysia Derivatives Exchange fell by 38 ringgit, or 0.75%, to close at 5,037 ringgit ($1,148.17) per metric ton. This downturn was influenced by weaker soyoil prices on the Chicago Board of Trade (CBOT) and fluctuations in China's Dalian Commodity Exchange.
In global markets, CBOT soyoil futures dropped by 1.23%, while Dalian's soyoil contract eased 0.25%. However, Dalian’s palm oil futures edged up slightly by 0.72%, providing minor support. Malaysian palm oil prices closely track these rival vegetable oils due to their shared market space.
The strengthening of the Malaysian ringgit, which rose 0.38% against the U.S. dollar, added further pressure. A stronger currency makes Malaysian palm oil less competitive for international buyers, amplifying the impact of global market dynamics.
On the supply side, Malaysia's palm oil inventories in November were estimated to have declined by around 9%-10% due to lower production and subdued exports. Meanwhile, Indonesia increased its CPO reference price for December to $1,071.67 per metric ton, up from $961.97 in November, resulting in a higher export tax of $178 per ton.
India, a key importer of palm oil, witnessed a surge in edible oil imports in November, reaching a four-month high as domestic refiners replenished stocks post-festive season demand. However, weak export data from Malaysia and reduced global demand weighed on overall sentiment.
Moving forward, market analysts will focus on export trends and production levels in the coming months, which are likely to influence price movements. While the CPO market faces immediate pressures, any signs of recovery in exports or production adjustments could help stabilize futures.
(By Commoditiescontrol Bureau: 09820130172)
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