Malaysian palm oil futures slid for a sixth consecutive session on Wednesday to their lowest in three months on pressure from expectations of lower demand in top importer India and rising domestic production.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange finished down 1.3 percent at 2,089 ringgit a tonne. Earlier in the session, the market hit its weakest since mid-December at 2,070 ringgit a tonne.
World palm oil demand may suffer its first contraction in two decades during the 2019/20 crop year due to rising domestic oilseed supplies in India and slowing demand in Europe and China, industry participants told Reuters.
“There is talk among traders that palm oil is being sold in India at below the market price from old stocks,” a Kuala Lumpur-based trader said.
“This might have an impact on demand.”
However, top analysts painted a bullish picture at last week’s key conference in Kuala Lumpur.
Malaysian palm oil futures are set to trade between 2,350 ringgit and 2,450 ringgit a tonne in four to six months, leading industry analyst Thomas Mielke said.
On the technical front, palm oil may test support at 2,094 ringgit, as indicated by its wave pattern and retracement analysis, according to Wang Tao, a Reuters market analyst for commodities and energy.
In related oils, Chicago soybean oil was down 0.4 percent and the most-active soyoil contract on the Dalian Commodity Exchange fell 1.3 percent.