JAKARTA: Malaysian palm oil futures dropped 0.7% on Monday to post its lowest closing in nearly eight weeks, dragged down by weaker soyoil prices in China.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell to 2,134 ringgit ($509.92) per tonne, the lowest closing since Aug. 7.

Palm extended the 3.4% loss last week.

“Palm is tracking other oils since it is still trying to look for a clear direction,” said a trader in Kuala Lumpur.

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

“Palm outlook points to some price increases, but short-term exports are still quite weak and palm output may still increase,” the trader said.

European crude palm oil prices are forecast to rise to $620 a tonne, or $570 free on board, by the second quarter of 2020 as stockpiles decline, James Fry, chairman of commodities consultancy LMC International, said last week.

Another analyst said India’s palm oil imports in 2019-20 were likely to rise to a record high, as consumption by the world’s biggest edible oil buyer is expected to expand more rapidly than local supplies.

Meanwhile, exports of Malaysian palm oil products for September fell 19.6% from a month earlier, cargo surveyor Intertek Testing Services said on Monday. – Reuters

Source : The Star