KUALA LUMPUR: Malaysian palm oil futures hit their lowest in nearly two months on Wednesday, tracking declines in related edible oils and as traders expect higher stockpiles in producer nations. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 1.8 per cent at 2,158 ringgit ($520.83) a tonne at the close of trade for a third consecutive day of losses.

The contract had earlier declined by as much as 1.9pc to 2,156 ringgit, its lowest since July 25. Trading volumes stood at 51,880 lots of 25 tonnes each at the close.

“Market sentiment was weakened by the overseas drop and also anticipation of a build-up in stocks,” said a one Kuala Lumpur-based futures trader said, referring to other edible oils on the US Chicago Board of Trade and Dalian Commodity Exchange. Stocks are expected to climb further, she said, with production growth seen outpacing gains.

Palm oil end-stocks in Malaysia climbed to a seven-month high in August as production levels increased and exports dropped, an industry regulator’s data showed last week. Another trader added that market sentiment was also dented by the “China-US problem”, referencing the deepening trade dispute between the two countries. The Chicago September soybean oil contract fell more than 1pc on Tuesday, weighed down by the trade war between China and the United States and a record US crop.

Published in Dawn, September 20th, 2018