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Palm slips due to profit-taking, but production worries cap losses

Malaysian palm futures fell for the second session in a row on Monday. Profit-taking weighed them down, but concerns about a fall in production supported prices.

At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for December delivery fell 6 ringgit or 0.14% to 4,436 Ringgit ($1,052.93) per metric ton. It closed Friday at 4,442 Ringgit, a 0.09% decrease.

Anilkumar bagani, research head at Mumbai-based Sunvin Group, said that the fall in crude palm oil futures was due to profit-taking, amid market speculation about a possible increase in import duties for vegetable oils by India.

Bagani also expressed concern about the lower than expected reduction in Malaysian production of palm oil.

According to a survey, Malaysian palm oil production and stocks are expected to fall in September for first time in 7 months.

On October 10, the Malaysian palm oil board will release its September supply and demand statistics.

The oil price rose by more than 1%, as OPEC+’s planned production rise for November was less than expected. This eased some supply concerns, but a weak outlook for the near term is likely to limit gains.

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

Chicago Board of Trade Soyoil Prices grew by 0.78%. Dalian Commodity Exchange will be closed on October 1-8 due to public holidays.

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

The dollar has weakened by 0.17%, which makes palm slightly cheaper to buyers who hold foreign currencies. $1 = 4.2130 Ringgit (Reporting and editing by Ashley Tang)

(source: Reuters)