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VEGOILS-Palm oil snaps 3-day rally on inflation jitters

VEGOILS-Palm oil snaps 3-day rally on inflation jitters

Reuters · 09/14/2022 06:24
VEGOILS-Palm oil snaps 3-day rally on inflation jitters

Updates with closing prices

By Mei Mei Chu

- Malaysian palm oil futures closed lower on Wednesday as traders booked profits after a three-day climb, with concerns about a global economic slowdown also weighing on sentiment.

The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange had slid 40 ringgit, or 1.03%, to 3,858 ringgit ($852.60) a tonne.

World stocks were stuck in a sea of red as market braced for an even more aggressive U.S Federal Reserve as inflation roars. [MKTS/GLOB]

"This (U.S. inflation data) stoked fears of a quicker and higher interest rate hike to come, setting the equities into a sell-off and spilling into the commodities market," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

The ringgit MYR=, palm's currency of trade, fell 0.4% to its lowest since 1998, making the commodity cheaper for holders of foreign currencies.

Malaysia is in the peak production season and palm oil board data showed a 9.7% month-on-month rise in August output. Analysts expect production to remain strong in September before tapering off in the fourth quarter.

Dalian's most-active soyoil contract DBYcv1 fell 0.2%, while its palm oil contract DCPcv1 gained 0.2%. Soyoil prices on the Chicago Board of Trade BOcv1 rose 0.6%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

The value of Colombia's palm oil exports may rise significantly to $800 million this year, thanks to high international prices and stable production, the palm growers association said on Tuesday.


($1 = 4.5250 ringgit)


(Reporting by Mei Mei Chu; Editing by Rashmi Aich, Subhranshu Sahu and Louise Heavens)

((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  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