Palm oil dipped ahead of Malaysian data due Thursday that are expected to show rising stockpiles and weaker exports from the world’s second-biggest grower.
Futures fell as much as 1.2% in Kuala Lumpur before paring losses, trading just below 5,000 ringgit a ton after briefly topping that level on Tuesday. Malaysian inventories likely expanded to the highest level since January last month as exports declined on softer-than-usual festival demand in major buyer India, according to a Bloomberg survey of executives, traders and analysts.
The "sluggish export pace” is weighing on market sentiment, said David Ng, a senior trader at IcebergX Sdn. Official figures are due Thursday from the Malaysian Palm Oil Board.
Still, downside in palm oil prices may be limited. Surging crude futures are bolstering the outlook for biofuel demand, while output and operations at plantations in Indonesia, the world’s biggest grower, are at risk from widespread forest fires. - Bloomberg
