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Palm extends its losses due to concerns about rising production and stocks

The market for Malaysian palm oils futures closed lower on Thursday. This was due to concerns about rising inventories, production and weak export demand.

At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery fell 26 ringgit or 0.61% to 4,241 Ringgit ($1,002.60).

David Ng said that the price of crude palm oil futures fell on concerns about rising production and stockpiles in the coming week. He is a proprietary trader with Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.

The recent weakness in export demand has also been seen to weigh down on the market sentiment.

According to cargo surveyors, the July palm oil exports fell between 6.7% and $9.7%.

On August 11, the Malaysian Palm Oil Board will release its data on supply and demand.

Dalian's palm oil contract, which is the most active contract in Dalian, fell 0.33%. Chicago Board of Trade soyoil fell by 0.52%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

After the Kremlin's announcement that Russian President Vladimir Putin would meet U.S. president Donald Trump within the next few days, there were expectations of a diplomatic resolution to the conflict in Ukraine.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Indonesian goods export to the U.S. are subject to a tariff of 19% as of August 7. However, the country continues to negotiate exemptions for certain key products such as crude palm oils.

The dollar has weakened by 0.07%, which makes palm slightly cheaper to buyers who hold foreign currencies. $1 = 4.2300 Ringgit (Reporting and editing by Ashley Tang, Sumana Nady and Eileen Soreng).

(source: Reuters)