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Palm falls as lower Indonesian export costs, weak crude, rising stockpiles weigh

By Reuters News

KUALA LUMPUR, Nov 2 (Reuters) - Malaysian palm oil futures slipped on Monday, as lower Indonesian export costs intensified competitive pressure, while weaker crude oil prices and concerns over rising inventories also weighed.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 33 ringgit, or 0.7%, to 4,648 ringgit ($1,143.70) a metric ton by the midday break.

The market began its first trading session of November on a weaker note after Indonesia cut its November crude palm oil reference price and export levy, prompting Malaysian crude palm oil prices to adjust lower to remain competitive, said a Kuala Lumpur-based trader.

The contract also retraced following weakness in energy prices and a lack of confirmation over Malaysian palm oil export tax waiver, said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group.

"In absence of a bullish story, the focus once again has shifted to the actual supply and demand scenario, where supply is still overpowering demand," he added.

Cargo surveyor Intertek Testing Services estimated that exports of Malaysian palm oil products for October rose 45.4% from a month earlier, while AmSpec Agri Malaysia is expected to release its estimates later in the day.

Oil prices slipped more than 3% after Iranian and Qatari officials held a third straight day of talks aimed at pushing for a deal to end the US-Israeli war on Iran. O/R

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

Dalian's most-active soyoil contract rose 0.59%, while its palm oil contract added 0.72%. Soyoil prices on the Chicago Board of Trade were up 0.02%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

The ringgit , palm's currency of trade, weakened 0.25% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

($1 = 4.0640 ringgit)

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