Crude Palm Oil Ends Down, Below MYR2,600/Ton; Likely Lower Exports, Crude
Crude palm oil futures on Malaysia’s derivatives exchange ended lower Wednesday as investors liquidated long positions in anticipation of likely lower palm oil exports during the Feb. 1-25 period.
Prices fell below the psychological level of MYR2,600 a metric ton towards the end of trade on the BMD as investors fear demand may decline further due to a narrowing price gap between palm oil and its rival soyoil, trade participants said.
The benchmark May CPO contract on the Bursa Malaysia Derivatives fell MYR45, or 1.7%, to end at an intraday low of MYR2,590/ton.
The price gap between palm oil, used in the manufacture of food products and as feedstock for biodiesel, and soyoil, a substitute, has narrowed to $40/ton from $100/ton in December last year, an executive from Singapore-based trading firm said.
Prices may ease further in the next trading session to MYR2,550/ton if crude oil extends its decline, he said.
Light, sweet crude for April contract was trading 47 cents lower at $78.39 a barrel at 1000 GMT.