Zhitong Finance APP learned that Malaysian palm oil futures prices fell to their lowest point in three weeks on Tuesday, mainly because of concerns that the Omicron variant may trigger a new round of global lockdown measures, weakening global demand for edible oil.
As of midday, the benchmark palm oil contract for delivery on the Malaysian derivatives exchange in February fell 1.65% to 4777 ringgit per metric ton (about 1,131.19 USD), the lowest since November 9.
A derivatives trader in Kuala Lumpur said: "Pursuant to the increasing market concerns about Omicron, vegetable oil futures have once again experienced selling pressure, causing the market to weaken."
The World Health Organization previously stated that the risk of a surge in infections caused by the Omicron mutant virus is very high, and the beginning of closing borders in some countries has cast a shadow on the economic recovery process under the influence of the new crown epidemic.
On the other hand, some analysts believe that the decline in palm oil futures may not "spent" because the futures market's expectations of a decline in palm oil production and strong exports in November have limited the decline in palm oil to a certain extent.
Independent cargo inspection company Amspec Agri said that palm oil exports rose 8% this month from the previous month to 1.57 million metric tons. Indonesia's non-mixed biodiesel consumption in 2022 is expected to reach 10 million kiloliters, higher than the 9.2 million kiloliters this year's target.
Information released by the Malaysian Ministry of Trade on Monday showed that the world's largest palm oil producer set the reference price of gross palm oil exports in December at US$1,365.99 per metric tonne, up from US$1,283.38 per metric tonne this month.
Paramalingam Supramaniam, director of commodity broker Pelindung Bestari, said that Indonesia's tax announcement made Malaysian crude palm oil more attractive globally, but buyers in the market are waiting for the external market to stabilize before they start bidding.
In addition, when palm oil competes for the market share in the global vegetable oil market, it is often affected by price fluctuations in other vegetable oil varieties, including soybean oil and rapeseed oil.
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