Crude palm oil futures on Malaysia’s derivatives exchange ended lower Thursday, erasing the previous day’s gains, tracking a decline in soyoil and weighed down by profit taking and long liquidation, said trade participants.
The benchmark December contract on Bursa Malaysia Derivatives finished MYR50 lower at MYR2,110 a metric ton after moving in a MYR2,108-MYR2,180/ton range.
Prices broke key support at MYR2,150, MYR2,130 and MYR2,118 in a single day, making the market vulnerable to further losses.
Profit taking that was seen toward the close yesterday continued today, said trade participants.
“There’s a lack of follow-through buying interest today. When prices weren’t able to break out of MYR2,180/ton, investors began liquidating their positions,” said an executive from a Kuala Lumpur-based global trading company.
The market opened higher but couldn’t maintain early gains, spurring investors to take profit. Prices eased into negative territory as export figures failed to exceed market expectations, said traders.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. estimated Malaysia’s Oct. 1-15 palm oil exports at 596,515 tons and 591,791 tons, respectively.
Both figures were higher on month but were within or slightly below market expectations of an 11%-12% rise in shipments to around 595,000 tons.
Traders also worry that demand for the commodity may soon ease after India and China, both major buyers of palm oil, announced record imports for vegetable oils in September, and both would have considerably high stockpiles of palm oil as their restocking activities gathered pace.
Separately, Pakistan may also slow down palm oil purchases from November onwards due to a surplus in palm oil stocks, said an industry official.
Buying may fall below 100,000 tons a month in the November-December period due to the arrival of cottonseed crops, leading to a decline in demand for palm oil, said A. Rasheed Janmohammad, vice-chairman of the Pakistan Edible Oil Refiners Association.
