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Palm drops more than 3% to lowest in five months

March 22, 2023 at 7:46 pm | Economic Affairs

March,22(Agencies) Malaysian palm oil futures tumbled on Wednesday to their lowest in five months, weighed down by sharp losses in rival edible oils and crude oil, and lingering concerns about the global banking crisis.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange slid 140 ringgit, or 3.7%, to 3,644 ringgit ($815.94) a tonne by the midday break, hitting its lowest since Oct. 14.
Palm fundamentals remain strong but trading is weighed down by bearish sentiment, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.“Adding to the woes is uncertainty over interest rate decision from the Fed,” Varqa said. While recent market turmoil has eased, the Federal Reserve’s interest rate decision later in the day is now a major focus for investors, with traders split over whether the US central bank would be forced to pause its hiking cycle to ensure financial stability.
Exports of Malaysian palm oil products for March 1-20 rose 30.4% to 929,274 tonnes from 712,740 tonnes shipped during the same period in February, cargo surveyor Societe Generale de Surveillance said on Tuesday.
Palm unchanged after three days of losses
Soyoil prices on the Chicago Board of Trade extended losses after falling 3% overnight. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell after an industry report showed US crude inventories rose unexpectedly last week, indicating that fuel demand may be weakening. Lower oil prices make palm a less attractive option for biodiesel feedstock.
Palm oil may test a support at 3,736 ringgit per tonne, a break below which could open the way towards 3,690 ringgit, Reuters technical analyst Wang Tao said.

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