You are here
Malaysian palm oil slips ahead of Christmas; supply concerns cap losses
[KUALA LUMPUR] Malaysian palm oil futures fell for a second straight session on Tuesday in thin pre-holiday trade, tracking weaker rival oils, although supply concerns and higher biofuel mandates capped the losses.
The benchmark palm oil contract, for March delivery, on the Bursa Malaysia Derivatives Exchange was down RM6, or 0.3 per cent, at RM2,913 (S$953.58) by 0241 GMT.
Palm prices have jumped over 35 per cent so far this year, on track for their best annual performance in nearly a decade.
Markets will be closed on Christmas Day, Dec 25, and will reopen on Dec 26.
- Domestic consumption is expected to increase as Malaysia, the world's second-largest producer of palm oil, plans to launch the B20 bio-diesel programme for the transport sector in phases by February next year.
- Indonesia, the world's top palm oil producer, on Monday launched biodiesel containing 30 per cent palm-based fuel, the highest mandatory mix in the world, in a bid to slash its fuel import bill and boost domestic palm oil consumption.
- However, poor rainfall and lower fertiliser use in both Malaysia and Indonesia earlier this year are likely to curb yields of the tropical oil in the first half of 2020, according to traders and analysts.
- Malaysia's palm oil exports have also been slowing, with Dec 1-20 export figures falling between 10.2 per cent and 13.5 per cent from a month earlier, according to cargo surveyors.
- Rival oils were also weaker, with Dalian's most-active soyoil contract trading 1 per cent lower, while its palm oil contract slid 0.4 per cent. Soyoil prices on the Chicago Board of Trade fell 0.5 per cent.
- Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.