08.11.2019 (Business Recorder) - Palm oil futures dropped on Thursday, giving up some of the previous session's gains as traders took profit while waiting for new leads.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 1.1% to 2,526 ringgit ($612.73) a tonne.
It was the largest intraday fall in almost four weeks, having hit its highest since January 2018 earlier in the week.
“There is some profit-taking and retracement in an overbought market," one Kuala Lumpur trader said. “Further correction down cannot be ruled out at this point, but it will limited due to supply-demand factors."
Total palm oil production in Indonesia and Malaysia is expected be flat next year, owing to dry weather and low fertiliser application in the world's top two producers of the vegetable oil, industry analyst Dorab Mistry said on Thursday.
Malaysian palm oil stockpiles are likely to have risen in October because production increased to its highest in a year even as export demand surged for the edible oil, a Reuters survey showed.
Inventories during October in the world's second-largest palm oil producer are forecast to rise 2.8% from September to a seven-month high of 2.52 million tonnes, according to a median estimate of seven planters, traders and analysts polled by Reuters.