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BMD Palm Extends Weakness on Dismal Export Numbers, Tracking Subdued US Soyoil

11 Feb 2019 11:29 am
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NEW DELHI (Commoditiescontrol) - Malaysian palm oil futures extended their losses in the first session of trade on Monday, tracking weakness in US soyoil and on dismal export numbers.

A fall in crude oil prices also weighed on sentiments.

The April benchmark crude palm oil contract on the Bursa Malaysia Derivatives Exchange (BMD), was down Ringgit 16 at Ringgit 2,274 per tonne at the midday break after moving in the range of Ringgit 2,290  to Ringgit 2,271 per tonne.

In other related oils, the CBOT March soybean oil contract was trading lower by 0.9 percent in electronic trade on Monday on concerns over US-China trade. Meanwhile, US negotiators are preparing to press China this week on longstanding demands that it reform how it treats US companies' intellectual property in order to seal a trade deal that could prevent tariffs from rising on Chinese imports. Palm oil prices are affected by movements in soyoil rates, as they compete for a share in the global vegetable oil market.

Besides, crude oil prices fell by around 1 percent on Monday as drilling activity in the United States, the world`s largest oil producer, picked up and financial markets were pulled down by trade concerns. Palm oil prices are also impacted by movements in crude oil, as the vegetable oil is used as feedstock to make biodiesel.

Furthermore subdued export numbers also dragged prices lower.

Exports of Malaysian palm oil products for Feb 1-10 fell 11.14 percent to 406,829 tonnes from 457,880 tonnes shipped during Jan 1-10, independent inspection company AmSpec Agri Malaysia said on Monday. Intertek Testing Services (ITS)  also pegged exports lower by 13 percent during the same period.

Malaysian Palm Oil Board (MPOB) also released stockpiles data after the end of the first session of trade. So market is likely to react on it in the second half. MPOB has estimated Malaysia's palm oil stockpiles at the end of January down by 6.7 percent from the previous month to 3 million tonnes.

While, production in January fell by 3.9 percent from the previous month to 1.74 million tonnes. Exports, however, jumped 21.2 percent from December to 1.68 million tonnes, according to MPOB data.

(By Commoditiescontrol Bureau)


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