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Palm oil futures fall to one-week low on rising production concerns

Reuters  |  KUALA LUMPUR 

By Emily Chow

(Reuters) - Malaysian hit their lowest in a week on Thursday, registering a fourth consecutive session of declines on concern over rising production in the coming months.

The benchmark for June delivery on the Bursa Derivatives Exchange fell 0.3 percent to 2,423 ringgit ($625.29) a tonne at the end of the trading day. It earlier fell as much as 1.2 percent to 2,403 ringgit, its weakest since April 4.

Trading volumes stood at 48,336 lots of 25 tonnes each at the close of trade.

"Rising production is weighing on prices," said one Kuala

"The sentiment this month is quite bearish as production is expected to be high," another said.

Palm rose to 1.57 million tonnes in March, up 17 percent from the previous month, according to data released by the this week.

The data also showed that stocks fell by a smaller than expected 6.2 percent to 2.32 million tonnes. A poll had forecast March end-stocks in to decline 8.6 percent from February to 2.27 million tonnes.

Output in the second quarter is expected to rise in line with the seasonal trend, pressuring palm that are forecast to drop by $40-$50 a tonne from current levels by July-August, said on Thursday.

Malaysian palm were last at $630 a tonne free on board (FOB) on Wednesday.

In related oils, the Chicago Board of Trade's May eased by 0.03 percent.

on China's fell 1.8 percent, while the Dalian May was down 1.5 percent.

Palm are affected by movements in rival edible oils that compete for a share in the global vegetable oils market.

($1 = 3.8750 ringgit)

(Reporting by Emily Chow; Editing by Sunil Nair and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 12 2018. 17:22 IST