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By Mei Mei Chu
KUALA LUMPUR, Aug 18 (Reuters) – Malaysian palm oil futures slid on Thursday, tracking losses in crude and rival edible oils, although a weak ringgit and lower export tax lent some support to the edible oil.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange fell 80 ringgit, or 1.91%, to 4,113 ringgit ($919.93) a tonne by the midday break, ending a two-day rise.
The contract gave up gains from earlier this week following troublesome macro factors, lead by lower crude oil prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Supporting prices, Malaysia has maintained its September export tax for crude palm oil at 8% and lowered its reference price, a circular on the Malaysian Palm Oil Board website showed on Wednesday.
The reduction in payable export tax brought Malaysian palm oil prices neck to neck with Indonesia’s palm oil offerings, Bagani said.
The ringgit MYR=, palm’s currency of trade, fell for a fourth day against the dollar to its lowest since January 2017, making the commodity cheaper for holders of foreign currency.
Dalian’s most-active soyoil contract DBYcv1 fell 1.1%, while its palm oil contract DCPcv1 dropped 2%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.12%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices were little changed as investors grappled with falling stockpiles in the United States, rising output from Russia and worries about a potential global recession.
Weaker crude futures make palm a less attractive option for biodiesel feedstock.
Palm oil is poised to break a support at 4,085 ringgit and fall towards the next support at 3,857 ringgit per tonne, Reuters technical analyst Wang Tao said. TECH/C
($1 = 4.4710 ringgit)
(Reporting by Mei Mei Chu; editing by Uttaresh.V and Rashmi Aich)
((Meifong.chu@thomsonreuters.com))
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