Palm oil tumbles to nine-month low, weaker crude offsets higher April exports
Reuters April 27, 2020
Malaysian palm oil futures fell to a nine-month low on Monday, as weakness in crude and rival oils on the Dalian exchange outweighed better April export volumes. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange slid 42 ringgit, or 2.02%, to 2,033 ringgit ($466.82) per tonne by 0240 GMT.
Earlier in the session, it fell to its lowest since July 25, 2019 of 2,022 ringgit. It lost 7.2% last week, its biggest weekly drop in eight, after a historic crude oil rout made palm oil less attractive as a biodiesel feedstock.
Palm oil exports from the world's second-largest producer, Malaysia, rose 8.8% in the April 1-25 period from the month before, according to AmSpec Agri Malaysia. Oil prices fell on signs that worldwide oil storage is filling rapidly, raising concerns that production cuts will not be fast enough to catch up with the collapse in demand from the coronavirus pandemic.
Dalian's most-active soyoil and palm oil contracts declined 1.7% each. Soyoil prices on the Chicago Board of Trade were up 0.2%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Palm oil may revisit its July 10, 2019 low of 1,916 ringgit per tonne, as it has broken a support at 2,084 ringgit, Reuters technical analyst Wang Tao said.
Asian shares inched higher ahead of a busy week for earnings and central bank meetings, with much chatter the Bank of Japan (BOJ) will announce more stimulus steps.