SINGAPORE, April 9: Malaysian palm oil futures ended slightly lower after hitting a near two-week high on Tuesday as fears over the bird flu outbreak in China and its impact on soybean prices outweighed hopes for lower palm inventory in the Southeast Asian nation, the world’s No.2 producer.
Industry regulator, the Malaysian Palm Oil Board (MPOB), will on Wednesday report stock levels for March, with a Reuters poll predicting a drop to 2.35 million tonnes from 2.44m in February.
“The rise in Dalian palm and soy and also the overnight gain in the US soy are helping the rally, while traders are also positioning ahead of MPOB data,” said Ker Chung Yang, investment analyst with Phillip Futures in Singapore.
“But the rise may be capped due to the bird flu situation in China.” Traders are keeping a close watch on the development of a new strain of bird flu in China, fearing that it could cut demand for soy used in animal feed in the world’s top importer of the bean, although the World Health Organisation said it was no cause for panic.
Soyoil is a close competitor of palm oil and a fall in soy prices could wean away demand from palm.
The benchmark June contract on the Bursa Malaysia Derivatives Exchange closed 0.2 per cent lower at 2,395 ringgit per tonne. Prices earlier touched a high of 2,419 ringgit on March 28.—Reuters