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Malaysian Palm oil futures see sharpest decline in 2 weeks on bearish data

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 0.9 per cent to 2,163 ringgit ($528.21) a tonne at the close of trade

Emily Chow | Reuters  |  Kuala Lumpur 

Malaysian Palm oil futures see sharpest decline in 2 weeks on bearish data

futures declined at their sharpest daily rate in two weeks on Thursday, snapping two sessions of gains, on bearish official data on December inventories, production and exports.

The benchmark contract for March delivery on the fell 0.9 per cent to 2,163 ringgit ($528.21) a tonne at the close of trade, its biggest daily decline since December 26, and coming off a near three-week high it hit in the previous trading session.

Earlier, it fell as much as 1.5 per cent to an intraday low of 2,150 ringgit. stood at 35,351 lots of 25 tonnes each at the end of the trading day.

Data from industry regulator, the Board (MPOB), released after the market paused for the midday break, showed end-stocks rising 6.9 per cent from the previous month to 3.21 million tonnes (mt).

Inventory levels are at their highest in at least 19 years, according to the Refinitiv Eikon data. Meanwhile, December production fell 2 per cent from the previous month to 1.81 million tonnes while exports edged up 0.6 percent from November to 1.38 mt, according to the MPOB data.

“Exports came in lower than expected, and with high imports, the stocks are above our estimates, which is considered bearish,” said a Kuala Lumpur-based trader. Another trader also said the decline in December’s production was lower than expected.

A Reuters survey had forecast palm oil’s end-December stockpiles edging up 4.3 per cent to 3.14 mt, while production was seen falling 3.6 per cent.

First Published: Fri, January 11 2019. 01:02 IST
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