Palm closes at 1-year low as recession fears hit commodities – Markets

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KUALA LUMPUR: Malaysian palm oil futures fell for a fourth consecutive session on Wednesday to their lowest level in nearly a year as growing fears of a global recession hammered commodities.

Also reeling from the higher supply outlook, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 117 ringgits, or 2.8%, to 4,057 ringgits (917 $.25) per ton.

It was down 10% earlier in the session, but shed some losses after the Southern Peninsula Palm Oil Millers’ Association (SPPOMA) reported July 1-5 production fell nearly 16% from the previous month, according to traders.

The main factors behind the collapse are the sale of funds, an increase in Indonesia’s export quota and improved production, said Paramalingam Supramaniam, director of Selangor-based brokerage Pelindung Bestari.

“We are entering months of peak production with concerns that ending stocks will reach 2 million tonnes by September.”

Malaysian palm oil is down after Indonesia this week raised its export quota to seven times the amount sold by domestic producers, from five earlier, in a bid to reduce growing oil stocks edible.

Palm hits 9-month low as Indonesia boosts exports

The world’s biggest producer plans to set its export benchmark price for crude palm oil every two weeks instead of every month, a senior Commerce Ministry official has said, in a bid to adjust faster to fast-changing international market prices.

Rising Indonesian stocks, recession fears and falling prices for Dalian edible oils and crude futures over the past two days have prompted some traders to sell, said Sandeep Singh, director of Farm Trade. , based in Kuala Lumpur.

The contract, which had soared earlier this year due to Russia’s invasion of Ukraine, is now trading at levels seen before the conflict.

Palm oil imports from India, the top buyer, in July are expected to hit their highest level in 10 months due to falling prices and Indonesia allowing more exports. four dealers told Reuters.

Dalian’s most active soybean oil contract fell 5.5%, while its palm oil contract fell 7.7%. Chicago Board of Trade soybean oil prices rose 0.3%.

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