BANGKOK: Malaysian palm oil futures fell more than 3 per cent on Friday and were expected to remain under pressure until at least the start of 2019 due to high inventories, traders said.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 3.6pc to 1,975 ringgit ($471.36) per tonne at the midday break. Trading volumes stood at 76,061 lots of 25 tonnes each at the close of trade.

“Prices are near the lows and could move higher early next year,” said one Kuala Lumpur-based trader. “The market is factoring in weakness because of higher inventory and production,” said a trader at Philip Futures.

Inventories in top producers Indonesia and Malaysia were expected to rise for the next two months, with demand unlikely to jump from key buyers as palm oil solidifies in winter months.

In other related edible oils, the Chicago December soybean oil contract was down 0.76pc. On the Dalian Commodity Exchange, the January soybean oil contract on the rose 1.15pc while the January palm oil contract rose 0.37pc.

Published in Dawn, November 17th, 2018