VEGOILS-Palm oil falls for third day, tracking weaker rival oils

By Matthew Chye

SINGAPORE, March 8 (Reuters) – Malaysian palm oil futures dipped on Wednesday, extending losses to a third consecutive session, as the oilseed tracked weakness in the prices of rival vegetable oils.

The benchmark palm oil contract FCPOc3 for May delivery on the Bursa Malaysia Derivatives Exchange slid 10 ringgit, or 0.24%, to 4,195 ringgit ($928.10) by the midday break.

The benchmark contract hit its lowest since Feb. 17 at 4,109 ringgit earlier in the session.

Dalian’s most active soyoil contract DBYcv1fell 1.22%, while its palm oil contract DCPcv1slid 1.85%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.94%.

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

Palm oil prices will improve in the second half of 2023 on tightening supplies, and refined bleached deodorized (RBD) palm olein prices could jump to $1,150 per tonne on a free-on-board basis, Thomas Mielke, head of analyst firm Oil World, told a conference on Wednesday.

Malaysia’s palm oil output in 2023 could be lower than expected if the El Nino weather pattern develops in the second half of the year, as forecast by some weather agencies, Nazrul Mansor, chief executive of the country’s biggest palm oil producer FGV Holdings FGVH.KL, told Reuters on Tuesday.

Malaysia’s palm oil stocks could fall below 2 million tonnes by the end of April, which would be the lowest since July, as exports are increasing after Indonesia restricted overseas sales, Ahmad Parveez Ghulam Kadir, director general of industry regulator the Malaysian Palm Oil Board (MPOB), told Reuters.

Palm oil companies in Malaysia must replantits vast hectarage of old, unproductive palm oil trees to overcome stagnant yields and maintain the country’s competitiveness as the world’s second-largest producer, Carl Bek-Nielsen, co-chairman of the Roundtable on Sustainable Palm Oil, said on Tuesday.

Palm oil FCPOc3 may fall more into a range of 4,081 ringgit to 4,112 ringgit per tonne, driven by a strong momentum, Reuters technical analyst Wang Tao said. TECH/C

($1 = 4.5200 ringgit)

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(Reporting by Matthew Chye; Editing by Sonia Cheema)

((Matthew.Chye@thomsonreuters.com; Mobile: +65 91552300))

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