Palm falls nearly 5% on weaker profits and exports

Malaysian palm oil futures tumbled on Thursday, after a record close the previous week, as traders posted profits while April’s export slowdown also weighed.

Benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange fell 348 ringgits, or 4.9%, to 6,756 ringgits ($1,554.18) a tonne at the break. noon.

Palm fell on profit taking and investors priced in soybean oil price moves after an extended pause, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

“April decline in exports and expectations of higher production pushing up inventories will also weigh on the futures contract,” Varqa added.

Exports of Malaysian palm oil products for April fell 13.9% to 16% from March, cargo inspectors said on Saturday.

The contract soared 11.8% last week to close at a record high after Indonesia’s top producer imposed a temporary export ban on crude and refined palm oil, heightening concerns over global oil supply. edible oil already affected by the conflict in Ukraine.

Indonesia’s export ban does not raise supply concerns for the European Union market, as the bloc has reserves for several weeks, European vegetable oil group FEDIOL said on Tuesday.

Putting further pressure on prices, the ringgit MYR=, the currency of exchange for the palm tree, rose 0.11% against the dollar after the US Federal Reserve raised its overnight rate by a half a percentage point.

A stronger ringgit makes palm oil more expensive for foreign currency holders.

Dalian’s most active soybean oil contract, DBYcv1, fell 2%, while its palm oil contract DCPcv1 fell 2.4%. Chicago Board of Trade BOcv1 soybean oil prices fell 0.04%.

Palm oil is affected by fluctuations in related oil prices as they compete for a share of the global vegetable oil market.
Source: Reuters (report by Mei Mei Chu; editing by Subhranshu Sahu and Shounak Dasgupta)