KUALA LUMPUR: Malaysian palm oil futures eased on Wednesday evening on bearish price and production forecasts at an industry conference in Kuala Lumpur.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange was down 0.2 per cent at 2,157 ringgit ($527.77) a tonne at the end of trading.
“Most of the speakers don’t seem too bullish,” said a Kuala Lumpur-based trader, referring to the industry conference.
Industry data from a millers association showing rising production in the first five days of March also weighed on the market, the trader added.
Analyst James Fry forecast benchmark palm oil prices to trade between 2,240-2,360 ringgit in 2019 amid declining growth in global output and higher drawdowns in reserves as biodiesel consumption rises. Malaysian palm oil futures are set to rise to between 2,350 ringgit and 2,450 ringgit a tonne in four to six months, another industry analyst Thomas Mielke said on Wednesday. Mielke also forecast global palm oil output would hit 75.26 million tonnes this year, up from 72.48m tonnes in 2018.
In related oils, the Chicago March soybean oil contract was last up 0.2pc. US soybeans rose for a third consecutive session on Tuesday, as an expected trade agreement between Washington and Beijing stoked hopes of increased demand for North American oilseeds.
The May soyoil contract on the Dalian Commodity Exchange declined 0.2pc and the Dalian May palm oil contract rose 0.4pc. Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.
Palm oil may retest a support at 2,117 ringgit per tonne as it could have resumed its downtrend from the February 7 high of 2,344 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Published in Dawn, March 7th, 2019