Palm oil plunges nearly 6% on economic woes, weak exports

Malaysian palm oil futures plummeted nearly 6% on Friday, on course for a fourth weekly loss, as they tracked a rout in crude futures and rival edible oils caused by recession fears and uncertainty over future OPEC+ output.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 280 ringgit, or 5.7%, to 4,630 ringgit ($1,050.84) during early trade.

It had dropped nearly 3% overnight, also weighed by weak June exports.


For the week, palm has lost 0.6% so far.

FUNDAMENTALS

* Malaysia's exports in June shrank between 10% and 13.4% from the previous month as shipments to India and the European Union slowed, cargo surveyors said on Thursday.

* Dalian's most-active soyoil contract fell 4.1%, while its palm oil contract slipped 5.4%. Soyoil prices on the Chicago Board of Trade were down 1.4%.

* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

* Oil prices edged up, after sinking 3% in the previous session as OPEC+ said it would stick to its planned oil output hikes in August and investors worried about the strength of the global economy.

* Weaker crude futures make palm a less attractive option for biodiesel feedstock.

* Palm oil may break a support at 4,742 ringgit per tonne, and fall to 4,588 ringgit, Reuters technical analyst Wang Tao said.

MARKET NEWS

* Bonds slipped, the dollar edged higher and Asia's stockmarkets made a shaky start to the second half on Friday, as investors grow increasingly nervous about the global economic outlook.