Malaysian palm oil futures saw a decline on Tuesday, following reports from the industry regulator revealing a drop in the country’s palm oil stocks, production, and exports.
The benchmark February palm oil contract on the Bursa Malaysia Derivatives Exchange fell by 165 ringgit, or 3.22%, closing at 4,955 ringgit ($1,119.52) per metric ton. The Malaysian Palm Oil Board (MPOB) data showed that palm oil stockpiles decreased for the second consecutive month in November, falling 2.6% to 1.84 million tons.
This reduction in stockpiles could potentially drive futures prices higher. Meanwhile, crude palm oil production decreased by 9.8%, marking its lowest November output in four years at 1.62 million tons. Exports also saw a significant dip, plunging 14.7% to 1.49 million tons.
“The MPOB’s data on end-stocks and exports aligns with analysts’ expectations, so there were no major surprises,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari. “Looking ahead, market attention will shift to December’s production patterns and the first quarter of 2025, particularly the impact of recent floods and heavy rains on output.”
A flood struck Malaysia following intense rainfall in late November, and the country’s meteorological department warned of a monsoon surge expected to bring continued rainfall to parts of Peninsular Malaysia’s east coast, as well as to the states of Sabah and Sarawak on Borneo Island. These regions are major palm oil producers.
In global markets, palm oil futures on China’s Dalian Exchange dropped 2.25%, while its soyoil contract saw a slight increase of 0.03%. The Chicago Board of Trade’s soyoil contract fell 1.61%. Palm oil prices often reflect the movements of other edible oils, as they compete for market share in the global vegetable oil sector.
Meanwhile, cargo surveyor Intertek Testing Services reported a 3.9% rise in Malaysian palm oil exports from December 1-10, while AmSpec Agri Malaysia noted a 1.1% increase for the same period.
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