Crude palm oil futures on the Bursa Malaysia Derivatives exchange may face selling pressure on Wednesday as the world’s top importer of edible oils reported a drop in shipments and reports surfaced that Malaysian exports of palm oil to China are facing delays.
Bursa Malaysia front-month palm oil futures for October settled up 0.4 percent at 2,213 ringgit ($540.42) a metric ton on Tuesday after hitting a one-week low on Monday. Trading volumes stood at 43,246 lots of 25 tonnes each at the end of the trading day. Phillip Futures has placed support at 2,150 ringgit a metric ton to resistance at 2,280 ringgit a metric ton.
India’s palm oil imports slumped 33 percent in July from a year earlier to 550,180 metric tons, the Solvent Extractors Association of India said on Tuesday, on the back of recent import levies by India and a sharply weaker rupee as one of several emerging markets that face balance of payment pressures. India is the world’s biggest importer of edible oils. Its total vegetable oil imports dropped 27 percent to 1.12 million metric tons in July, it said.
In addition, on Tuesday, Malaysia’s Ministry of Primary Industries responded to reports that a unit responsible for export promotion was slow in responding to, or following up with, requests by buyers from China to purchase palm oil.
Comments from Minister Teresa Kok, according to reports in the Malaysian press, said she had found letters addressed to a unit under her ministry from Chinese buyers wishing to increase their purchase of the commodity, but the unit concerned did not respond to the requests.
But she later backed away from the comments. “The minister has always acknowledged that the ministry’s officers, the Malaysian Palm Oil Board and the Malaysian Palm Oil Council have been working relentlessly to promote palm oil throughout the world,” the ministry said in a statement on Tuesday.
Malaysian palm oil exports rose 8.6 percent to 12.44 million metric tons from January to June 2018, compared with 11.45 million metric tons in the corresponding period in 2017. China is a top buyer of Malaysian palm oil and trading partner with Malaysia, though there has been friction as new Malaysian Prime Minister Mohammed Mahathir moves to cancel Chinese-led projects in Malaysia initiated by his predecessor Najib Razak.