JAKARTA: Malaysian palm oil futures fell for a fourth straight session on Thursday and closed at the lowest since October 1, weighed down by expectations of a rise in production, although strong rival oils limited further losses.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange were down 3 ringgit, or 0.07%, to 4,012 ringgit ($910.78) a metric ton at the close.
The contract rose as much as 1.57% earlier in the session, tracking rival vegetable oils and crude oil before retreating.
“When the Dalian market closed, without any further influence, the market resumed its selling pressure on the back of rising production and lower future exports due to current volatilities,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract was up 0.83%, while its palm oil contract gained 1.21%. Soyoil prices on the Chicago Board of Trade (CBOT) were barely changed, up 0.02%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices extended gains on prospects of tighter supply after the U.S. imposed further sanctions to curb Iranian oil trade and as some OPEC producers pledged further output cuts.
Palm oil falls for third day on weak rival oils, strong exports limit losses
Strong crude oil prices make palm oil a more attractive option for biodiesel feedstock.
Meanwhile, Malaysia maintained its May export tax for crude palm oil at 10% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Tuesday.
Exports of Malaysian palm oil products for April 1-15 are estimated to have risen between 13.6% and 17% from a month ago, said cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
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