Commodities
Asia Biofuels Update: Palm Oil Falls on Profit-Taking
Malaysian palm oil futures retreated on Monday on profit-taking after prices reached their highest level since early April in the previous session, while a sharp drop in crude oil prices provided further downside.The Bursa Malaysia Derivatives' August crude palm oil contract fell 0.78% to 4,555 Malaysian ringgit ($1,114.92) per metric ton. The September contract dropped 1.03% to 4,629 ringgit/mt.Interband Group of Co. senior palm oil trader Jim Teh told Bernama that palm oil is expected to trade between 4,400 ringgit/mt and 4,500 ringgit/mt this week, as traders lock in gains following a recent rise in prices.High inventories in Malaysia and Indonesia will also reportedly pressure prices, despite presence of demand from importing regions, including India, China, Pakistan, the Middle East, the EU and the US.Purchases from top importer India are expected to rebound from July through October ahead of Diwali.Edible oil prices in the country are rising due to prospects of lower supplies from Indonesia following its expanded biofuel policy, Deccan Chronicle reported, citing the Reserve Bank of India.In China, several cargoes were recently booked as import margins remained positive despite elevated domestic inventories, price reporting agency MySteel said.During the July 1-25 period, cargo surveyor Intertek Testing Services, as cited by Trading Economics, reportedly estimated Malaysian shipments to have risen 15.9% from a month earlier.However, a strengthening local currency could dampen export competitiveness as it makes cargoes more expensive. Malaysian ringgit firmed against the US dollar by 0.16% on Monday, extending last week's 0.08% rise.Going forward, RHB Investment Bank, as cited by Business Today, projects prices to see another technical resistance at 4,900 ringgit/mt after a recent improvement in supply and demand fundamentals resulted in a technical breakout at 4,700 ringgit/mt last week.
