Malaysian Palm Oil Council Russia's Post

VEGOILS-Palm oil eases as China sticks to pandemic restrictions

SINGAPORE, Nov 7 (Reuters) - Malaysian palm oil futures slid on Monday, giving up some of last week's strong gains, as leading buyer China denied it was considering easing its zero COVID-19 policy.

The benchmark palm oil contract FCPOc3 on the Bursa Malaysia Derivatives Exchange lost 19 ringgit, or 0.4%, to 4,348 ringgit a tonne in early trade. The contract climbed more than 9% last week.

FUNDAMENTALS
China reported its highest number of new COVID-19 infections in six months on Sunday, a day after health officials said they were sticking with strict coronavirus curbs, likely disappointing recent investor hopes for an easing.

The global outlook for palm oil remains uncertain, with strict pandemic policies in major importer China weighing on demand, while high energy prices and a slowdown in output provide support, leading industry analysts said at an industry conference on Friday.

Malaysia's benchmark palm oil contract is expected to trade between 3,500-4,500 ringgit per tonne until the end of March next year, leading industry analyst Dorab Mistry said.

Thomas Mielke, head of Hamburg-based analyst firm Oil World, said global palm oil output is seen rising by 2.9 million tonnes in the 2022/23 season, but noted output yield has been on a downtrend in recent years, which he said was "alarming".

Malaysia's palm oil inventories at end-October likely swelled to its highest in three and a half years as production improved while imports slumped, a Reuters survey showed on Friday.

Stockpiles were pegged to rise 9.3% from September to 2.53 million tonnes, its largest since April 2019, according to the median estimate of eight traders and analysts polled by Reuters.

Indonesia's palm oil and kernel oil production is expected to edge down to 51.3 million tonnes this year, from 51.6 million tonnes in 2021, an Indonesia Palm Oil Association (GAPKI) executive told an industry conference on Friday.

In related edible oils, Dalian's most-active soyoil contract DBYcv1 fell 0.6%, while its palm oil contract DCPcv1 gave up 1.4%.

Palm oil may retest a support at 4,264 ringgit a tonne, a break below which could open the way towards a 4,072-4,135-ringgit range, according to Wang Tao, a Reuters technicals analyst for commodities and energy.

MARKET NEWS
U.S. stock futures slipped in Asia, after Beijing denied it was considering easing its zero COVID-19 policy, helping the dollar recover some losses while dealing a setback to oil and commodities.
By: via Malaysian Palm Oil Council Russia