Palm oil hits fresh 6-month high on lower output forecast

Malaysian palm oil futures fell on Friday after three straight sessions of gains, tracking weakness in overnight US soyoil prices.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 per cent at 2,249 ringgit ($537.01) per tonne around noon.

"Palm prices are mirroring overnight declines in rival oilseed soyoil," said a Kuala Lumpur-based futures trader, adding that profit-taking was also seen.

Palm hit a six-month high of 2,265 ringgit in the previous session, and has gained 2.6 per cent so far this week on slower-than expected output and stronger exports.

Data released by a state millers association earlier this week showed slower output growth for the first 20 days of August compared with a month earlier, according to traders.

Malaysian palm oil exports during Aug. 1-20 rose between 6.2 per cent and 13 per cent from a month ago, data from cargo surveyors showed.

 

Meanwhile, US soyoil futures on the Chicago Board of Trade declined 0.8 per cent on Thursday, and were last down 0.03 per cent on Friday.

In other related oils, the September soyoil contract on the Dalian exchange eased 0.1 per cent, while the Dalian September palm oil contract rose 0.7 per cent.

Palm oil prices are impacted by movements in related vegetable oils, as they compete for a share in the global edible oils market.

($1 = 4.1880 ringgit)

($1 = 71.8650 Indian rupees)

($1 = 7.0928 Chinese yuan)