Malaysian palm oil futures experienced a dip on Wednesday, ending a two-session rally. The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange fell by 13 ringgit, or 0.26%, to 4,960 ringgit ($1,226.81) per metric ton. This decline was attributed to profit-taking and anemic export demand.
Industry experts noted that demand remained weak, particularly from India, a major buyer, which is reportedly well-covered. The current high palm oil prices are also seen as unfavorable for Indian buyers. Cargo surveyors estimated that Malaysian palm oil product exports in August declined between 6.5% and 14.9% from the previous month. Traders are awaiting official data from the Malaysian Palm Oil Association to assess August production patterns and any impact from hot and dry weather.
While soyoil contracts on the Chicago Board of Trade were down 0.34% and Dalian's palm oil contract shed 1.04%, its soyoil contract rose 0.45%. Palm oil prices are influenced by competing edible oils in the global market. Stronger crude oil futures, however, could make palm oil a more attractive option for biodiesel feedstock. Despite the short-term dip, concerns about the El Niño weather pattern and its potential to affect production in the coming months, along with Indonesia's B50 biodiesel mandate, continue to provide underlying support for palm oil prices.
