Malaysian Palm Oil Council Russia's Post

Palm Oil Resumes Declines as Other Edible Oil Prices Weaken

(Bloomberg) -- Palm oil resumed its decline, tracking weakness in other vegetable oil markets, although prices remain supported by the export outlook and a widening discount against substitute oils.

Futures in Kuala Lumpur fell 1% to 3,876 ringgit a ton at the midday break after a choppy session. They dropped for the seventh time in eight days as traders assessed rising supplies in producers Indonesia and Malaysia, the two biggest producers. Palm oil has been dragged lower by weakness in Chinese prices and a lack of positive news, according to Abdul Hameed, director of sales at Manzoor Trading in Lahore. Traders are also avoiding taking risky positions ahead of official supply data for July from the Malaysian Palm Oil Board, as well as US crop updates due next week, he said.

Still, optimism that robust export demand will continue this month is underpinning prices. Palm’s discount to soybean oil, its closest substitute, widened to around $480 a ton on Thursday, from about $265 in mid-May, making it more appealing for price-sensitive buyers.
“Market sentiment isn’t too bearish as high imports from India and China in the last two months indicate that palm oil demand is rising,” Hameed said. The wide spread between palm and soyoil is creating room for further purchases, while uncertainty over how the war in Ukraine will affect edible oil supplies is also supporting prices, he said.
By: via Malaysian Palm Oil Council Russia