KUALA LUMPUR: Palm oil futures slid to fresh lows on Monday evening, hitting their weakest in five and a half months, as traders were cautious ahead of official data from the Malaysian Palm Oil Board scheduled for release on Tuesday.
Palm oil stockpiles in Malaysia, the world’s second-largest producer after Indonesia, are seen rising in November as export volumes fall faster than output, weighing on prices.
A Reuters poll forecast that inventories at the end of November will rise 11.4pc to 2.44m tonnes on-month, its highest levels in about two years, while output is pegged to drop 3pc to 1.95m tonnes.
Exports are forecast to fall 6 per cent from October to 1.45m tonnes in November.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 0.8pc to 2,459 ringgit ($603.44) a tonne at the close of trade, charting a sixth consecutive day of declines.
It earlier fell to 2,455 ringgit, its lowest since June 30. Trading volumes stood at 45,026 lots of 25 tonnes each at the end of the trading day.
Palm oil may fall to 2,462 ringgit per tonne, a break below which could cause a loss to 2,426 ringgit, said Wang Tao, a Reuters market analyst.
The Dalian January palm olein contract also dipped 0.2pc. Palm oil prices are affected by other edible oils as they compete for a share in the global vegetable oils market.
Published in Dawn, December 12th, 2017
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