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VEGOILS-Palm hits over 2-month low on weaker crude, Indonesian export policy

reuters.com · 06/12/2022 23:57
VEGOILS-Palm hits over 2-month low on weaker crude, Indonesian export policy

- Malaysian palm oil futures touched a more than two-month low on Monday and extended losses for a fourth consecutive session, as weak crude and Indonesia's plans to accelerate exports weighed on prices.

The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange fell 124 ringgit, or 2.09%, to 5,796 ringgit ($1,313.09) a tonne by 0343 GMT, its lowest since April 8. It dropped 8.3% last week.


FUNDAMENTALS

* Indonesia, the world's biggest exporter of palm oil, has yet again reversed its export policy, looking to accelerate shipments just weeks after ending a three-week export ban aimed at maintaining domestic supply. nL4N2XX1CQ

* The country has issued export permits for about 460,000 tonnes of palm oil products as of June 9, a senior trade ministry official said on Friday. nJ9N2W4017

* Meanwhile, Malaysia's end-May inventories shrank as exports surged to a five-month peak, while production was virtually unchanged, data from the Malaysian Palm Oil Board (MPOB) showed on Friday. nL1N2XX07O

* Oil prices slipped more than $2 as a flare-up in COVID-19 cases in Beijing quelled hopes for a rapid pick-up in China's fuel demand, while worries about global inflation and economic growth further depressed the market.

* Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. O/R

* In rival oils, Dalian's most-active soyoil contract DBYcv1 fell 1.3%, while its palm oil contract DCPcv1 lost 2.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.2%.

* The ringgit MYR=, palm's currency of trade, fell 0.32% against the dollar, making the commodity cheaper for holders of foreign currencies.

* Palm oil may drop to 5,702 ringgit per tonne, Reuters technical analyst Wang Tao said. TECH/C


MARKET NEWS

* Asian stocks sank on Monday and bond yields ticked higher, as red-hot U.S. inflation reignited worries about even more aggressive Federal Reserve policy tightening, and a COVID-19 warning from Beijing added to concerns about growth. MKTS/GLOB

DATA/EVENTS (GMT, April)

0600 UK GDP Est 3M/3M

0600 UK GDP Estimate MM, YY

0600 UK Manufacturing Output MM


($1 = 4.4150 ringgit)



($1 = 4.4140 ringgit)


(Reporting by Mei Mei Chu in Kuala Lumpur; editing by Uttaresh.V)

((meifong.chu@thomsonreuters.com))

For a table on Malaysian physical palm oil prices, including refined oil, Reuters Terminal users can double click on or type OILS/MY01. * To view freight rates from Peninsula Malaysia/Sumatra to China, India, Pakistan and Rotterdam, please key in OILS/ASIA2 and press enter, or double click between the brackets.  * Reuters Terminal users can see cash and futures edible oil prices by double clicking on the codes in the brackets: To go to the next page in the same chain, hit F12. To go back, hit F11. Vegetable oils                       OILS/ASIA1 Malaysian palm oil exports           SGSPALM1   CBOT soyoil futures                  0#BO:      CBOT soybean futures                 0#S:       Indian solvent                       SOLVENT01  Dalian Commodity Exchange            DC/MENU   Dalian soyoil futures                0#DBY:   Dalian refined palm oil futures      0#DCP:   Zhengzhou rapeseed oil               0#COI:   European edible oil prices/trades    OILS/E