Vegoils: Palm extends fall to over 22-month low, dragged by weaker related oils

(Reuters) – Malaysian palm oil futures extended falls to a more than 22-month low on Wednesday, tracking weakness in related edible oils.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,318 ringgit ($580.66) per tonne, its eighth session fall in a row.

During the session, it fell as much as 1.1 percent to 2,300 ringgit, the lowest since July 28, 2016.

Trading volumes stood at 55,823 lots of 25 tonnes each.

Sentiment has been hurt by softer rival oils and crude oil, said a trader based in Kuala Lumpur.

Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.

The September soybean oil on China’s Dalian Commodity Exchange fell as much as 1.7 percent while the Dalian September palm oil contract dropped as much as 2.1 percent.

The Chicago July soybean oil contract bucked the trend rising 0.4 percent, after recording a 1.7 percent drop on Tuesday.

Palm oil has declined 2.1 percent so far this week and 4.7 percent this month on weak demand and outlook, alongside talk of higher output and inventories.

For June 1-10, exports of palm oil, an ingredient for soap and chocolate, slumped 20 percent from a month earlier to 324,947 tonnes, independent inspection company AmSpec Agri Malaysia said on Monday.

Although selling pressure in China could dampen appetite for palm, the slight weakness in the ringgit may limit the decline, said another trader.

Weakness in the ringgit, the currency in which palm is traded, makes the tropical oil more appealing to traders holding foreign currencies. The currency was last down 0.1 percent.