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Palm drops more than 4% on Indonesian exports

June 20, 2022: Malaysian palm oil futures plunged for a fourth straight session on Monday to a five-month low, as Indonesia boosted exports and output expectations improved, with cheaper crude and rival oil prices weighing on sentiment.

The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange fell 4.27% to 5,221 ringgit ($1,186.59) per tonne in early trade.

The contract lost about 8% on Friday and posted the worst weekly session in six weeks.

FUNDAMENTALS

The world's top palm oil exporter Indonesia has issued permits for the shipment of more than 820,000 tonnes of edible oil under its Domestic Market Obligation scheme and export acceleration programme as of last week, a trade ministry official said. 

Top vegetable oil importer India has reduced the base import prices of crude palm oil, soyoil, gold, and silver, the government said last week. 

Dalian's most-active soyoil contract DBYcv1 fell 1.6%, while its palm oil contract DCPv1 fell 3.2%. The Chicago Board of Trade was closed on Monday for the Juneteenth holiday.

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

MARKET NEWS

Oil prices wobbled early on Monday as investors refocused on tight supplies, though sentiment was still fragile after a 6% slump in the previous session amid concerns about slowing global economic growth and fuel demand. 

Asian shares were unable to sustain a rare rally on Monday as Wall Street futures shed early gains amid worries the U.S. Federal Reserve would this week underline its commitment to fighting inflation with whatever rate hikes were needed.

Reuters

Posted on: 2022-06-20T09:52:09+05:00

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