Palm hits three-week low on Omicron variant fears

November 30, 2021: Malaysian palm oil futures fell to three-week lows on Tuesday, weighed down by concerns that the Omicron coronavirus variant would disrupt demand for global edible oils.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 85 ringgit, or 1.75%, to 4,772 ringgit ($1,127.87) a tonne in early trade, hitting its lowest since Nov. 9.

FUNDAMENTALS

* Expectations for lower November production and robust exports limited losses in palm oil futures as investors awaited cargo surveyor data due later in the day.

* Indonesia set its crude palm oil export reference price at $1,365.99 per tonne for December, up from November's $1,283.38 per tonne, a Trade Ministry regulation released on Monday showed.

* Indonesia's 2022 unblended biodiesel consumption is seen at 10 million kilolitres (KL), up from the targeted 9.2 million KL this year, according to a senior energy ministry official.

* Dalian's most-active soyoil contract fell 2.7%, while its palm oil contract dropped 2.4%. Soyoil prices on the Chicago Board of Trade were down 1.7%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Palm oil still targets its Nov. 9 low of 4,706 ringgit per tonne, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Asian share markets were trading in positive territory as investors became cautiously optimistic the new Omicron variant might not cause a widespread global economic disruption to worsen the coronavirus pandemic.

Reuters