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Palm oil falls for second day on recession jitters

September 23, 2022: Malaysian palm oil futures extended losses on Friday, as the market was dominated by worries that rising interest rates to curb inflation would spark a recession, although the contract was set for a second weekly gain.

The benchmark palm oil contract FCPOc3 for December delivery on the Bursa Malaysia Derivatives Exchange slid 80 ringgit, or 2.09%, to 3,746 ringgit ($820.23) a tonne during early trade.

For the week, the contract has risen 0.6% so far.

FUNDAMENTALS

* Macroeconomic worries hung over global equity and commodities markets a day after the U.S. central bank hiked rates by 75 basis points for a third time, as expected, and raised its rate target to its highest since 2008.

* Indonesia's palm oil exports are set to jump in the second half of the year after the scrapping of export levies, but the annual total will still be lower than last year's 33.7 million tonnes due to earlier restrictions, the Indonesian Palm Oil Association said on the sidelines of the Global Conference in Agra, India.

* Dalian's most-active soyoil contract DBYcv1 fell 1.5% while its palm oil contract <DCPcv1 dropped 2.2%. Soyoil prices on the Chicago Board of Trade BOcv1 were also down 1.1%.

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

MARKET NEWS

* Asian stocks limped toward a fourth straight weekly decline on Friday and bonds nursed big losses as investors scrambled to catch up with the U.S. Federal Reserve's interest rate outlook, while currency markets were on edge at the end of a wild week.

Reuters

Posted on:2022-09-23T09:24:24+05:00

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