Palm oil tracks rival oils lower

June 01, 2022: Malaysian palm oil futures eased on Wednesday tracking weakness in rival oils, although losses were limited by concerns of a slower output recovery after Indonesia stopped a batch of migrant workers from entering labor-starved Malaysian estates.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange slid 56 ringgit, or 0.89%, to 6,248 ringgit ($1,425.83) a tonne during early trade, down for a third in four sessions.

FUNDAMENTALS

Indonesia canceled a plan to send its citizens to work in palm oil plantations in neighboring Malaysia, which has faced a labor shortage, its envoy to Kuala Lumpur said on Tuesday. 

India has slashed the base import prices of crude and refined palm oil while raising the price of crude soyoil, the government said in a statement late on Tuesday. 

Indonesia set crude palm oil reference price at $1,700.12 per tonne for June, a senior official at the coordinating ministry of economic affairs, Musdhalifah Machmud, said on Tuesday, up from May's $1,657.39 a tonne. 

Dalian's most-active soyoil contract DBYcv1 fell 0.4%, while its palm oil contract DCPcv1 eased 0.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.03%.

Palm oil looks neutral in a range of 6,220-6,423 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.

MARKET NEWS

Stocks steadied in Asia, as Shanghai emerged blinking from two months of lockdown and a dip in oil prices dangled the prospect of a respite from rising energy prices, but nerves about inflation kept investors and bond markets on edge. 

Reuters