Palm oil down

KUALA LUMPUR: Malaysian palm oil fell on Friday, headed for a second day of decline, as it tracked losses in overnight soyoil on the Chicago Board of Trade.

The market was also dragged down by high inventories, but could hold near current levels on expectations of improving demand and weaker output, said a trader.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.5 percent to 2,509 ringgit ($618.44) a tonne at the midday break.

Palm oil prices have been trending downwards since November, after India raised import taxes on edible oils to their highest in more than a decade, cutting demand.

Palm oil futures have lost 3.6 percent so far in December, and have also shed nearly 20 percent in 2017. Trading volumes on Friday were thin at 8,909 lots of 25 tonnes each by the midday break.

"The market is down on overnight soyoil, but seen holding well at current levels as we are looking at better exports and falling production," said a Kuala Lumpur-based trader.

"But December´s end-stocks (are expected to) be the highest of the year," he said, and that has been putting pressure on prices this month.

Palm oil shipments from Malaysia, the world´s second largest producer after Indonesia, rose about 1 percent during Dec. 1-25 versus a month earlier, showed data released by cargo surveyors Intertek Testing Services (ITS) and Societe Generale de Surveillance (SGS).

Demand is expected to improve in the coming weeks as key buyer China stocks up ahead of Lunar New Year celebrations.

Malaysian palm oil production is seen declining through the first quarter of next year, in line with seasonal trends.

Output fell 3.3 percent to 1.94 million tonnes in November.

In other edible oils, the March soybean oil contract on the Chicago Board of Trade dropped 1.7 percent in its previous session, and was last up 0.2 percent.

The May soybean oil on the Dalian Commodity Exchange was down 0.8 percent, while the Dalian January palm oil contract fell 0.2 percent.

from The News International - Business http://ift.tt/2Ei92Sn