Malaysian palm oil futures decline due to global market trends

Malaysian palm oil futures experienced a second consecutive decline on Thursday following the Labour Day holiday, reflecting a downward trend in Chicago soyoil prices. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange dropped by 9 ringgit, or 0.24%, to 3,809 ringgit ($798.70) per metric ton at 0236 GMT.

In April, Malaysian palm oil exports saw a decline ranging between 9% and 11.5% compared to the previous month, as reported by cargo surveyors Intertek Testing Services and Amspec Agri. Meanwhile, Indonesia, the largest palm oil exporter globally, maintained its palm oil export tax and levy for May at $52 per ton and $90 per ton, respectively.

Indonesia faced a significant drop in palm oil shipments in February, down by 25%, as consumers shifted towards more affordable alternative vegetable oils. The Dalian Commodity Exchange remained closed until May 5 for International Labour Day holidays, impacting market dynamics.

Palm oil prices are influenced by movements in related oils as they compete for market share in the global vegetable oils sector. Analysts suggest that palm oil futures may test support at 3,787 ringgit per metric ton, with a potential further decline towards the 3,744-3,760 ringgit range if this support level is breached.

In conclusion, the palm oil market is currently navigating challenges posed by fluctuating export figures, tax policies, and competition from other vegetable oils. Investors and industry stakeholders are closely monitoring price movements and market dynamics to assess future trends in the palm oil sector.