Indonesia: Palm Oil Wipes Out 2022 Gains on Exports Boom and Crude’s Slump

• Palm oil wiped out its gains for 2022 on expectations of surging exports from Indonesia and as a slide in petroleum prices reduces its biofuel appeal.
• Futures for Sep 22 delivery slumped 9.7% to close at MYR4,498 a ton, the lowest since Dec 21 for the most active contract.
• The tropical oil slipped for a sixth day in the longest losing streak since Mar 22. Canola futures also dropped to the lowest since Oct 21.
• The pressure of rising supplies from Indonesia and Malaysia is weighing on prices, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental.
• Indonesia has issued a total of 1.51 million tons of palm oil export permits as of 22 Jun 22. The top producer wants to speed up shipments to flush out overflowing stockpiles after lifting a ban on exports in May 22.
• A slump in crude oil is adding to the bearish sentiment. West Texas Intermediate tumbled below USD104 a barrel as investors weighed escalating concerns that the US may be headed for a recession. Other raw materials, including copper, also declined.
• The outlook for palm oil does not look optimistic due to sluggish demand and accelerating Indonesian exports, according to Chinese brokerage SHZQ Futures.
• Thiagarajan echoed the view. “Demand concerns are visible as the festival season demand is quite far away for India. We see more weakness for crude palm oil prices going forward,” he added.

External Link : https://www.bloomberg.com/news/articles/2022-06-22/palm-oil-rout-deepens-on-surging-exports-and-crude-oil-s-slump