Band Mei Mei Chu
KUALA LUMPUR, July 21 (Reuters) – Malaysian palm oil futures fell slightly on Wednesday due to a drop in exports from July so far and lower prices for rival Chicago soybeans, but losses were limited by a ringgit weaker and supply concerns.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange ended down 6 ringgit, or 0.14%, at 4,145 ringgit ($ 979.91) per tonne, after falling 1.76% during the session.
Prices fell as the poor performance of the Dalian and Chicago stock exchanges prompted traders to post profits, said Paramalingam Supramaniam, director of Selangor-based brokerage firm Pelindung Bestari.
A lower ringgit and firmer physical prices for crude palm oil helped prevent a massive sell-off, he added.
The ringgit MYR =, the currency of palm oil, fell 0.19% against the dollar to its lowest level since August 2020, making palm oil more attractive to foreign currency holders.
Malaysia’s export shipments from July 1 to July 20 fell 7.9% to 863,586 tonnes from the same period in June, freight expert Amspec Agri said.
There are risks that palm oil production will be below its potential due to the impact of declining fertilizer use over the past two years and a labor shortage in Malaysia, Ong Chee Ting, analyst at Maybank Kim Eng, said in a note.
Dalian’s most active soybean oil contract DBYcv1 fell 0.3%, while its palm oil contract DCPcv1 was unchanged. Soybean Oil Price on the Chicago Board of Trade BOcv1 were down 1%.
Palm oil is affected by fluctuations in the prices of related oils, as they compete for a share of the global vegetable oil market.
($ 1 = 4.2300 ringgits)
(Reporting by Mei Mei Chu; editing by Vinay Dwivedi and Aditya Soni)
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