Palm oil falls on concerns over weak exports

July 27, 2022: Malaysian palm oil futures fell on Wednesday, down for a fourth session in five, dented by softer demand and concerns over exports from top producer Indonesia flooding the market.

The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange slid 66 ringgit, or 1.74%, 3,721 ringgit ($835.05) a tonne during early trade.

FUNDAMENTALS

Palm oil prices will weaken further in the short term due to softer demand and "distress selling" by top producer Indonesia, commodities consultancy LMC International forecast on Tuesday. 

Exports of Malaysian palm oil products for July 1-25 fell 2.2% from the same period in June, cargo surveyor Societe Generale de Surveillance said on Tuesday. 

China has committed to importing an additional 1 million tonnes of Indonesian crude palm oil, the Indonesian state palace said in a statement on Tuesday. 

Dalian's most-active soyoil contract DBYcv1 fell 0.4%, while its palm oil contract DCPcv1 slipped 2.9%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.2%.

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

Palm oil remains neutral in a range of 3,598 ringgit to 3,857 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said. 

MARKET NEWS

Better-than-expected results at Microsoft and Google helped soothe a nervous mood in stock markets on Wednesday, while a cut in Russian gas flow dragged on the euro and a Federal Reserve meeting due later in the day kept bonds and the dollar on edge. 

Reuters