VEGOILS-Palm falls as analyst forecasts abundant supplies

  • Reuters
  • Commodities News
VEGOILS-Palm falls as analyst forecasts abundant supplies

* Palm reversed momentum to end lower

* Contract gains 5.7% this week

* Traders taking profit ahead of weekend

* Supply forecast to increase fast

* Indian port to shut weekend operations - trader (Updates with closing prices, fresh quotes)

By Liz Lee and Fathin Ungku

KUALA LUMPUR/SINGAPORE, April 23 (Reuters) - Malaysian palm oil futures fell on Friday, snapping three straight sessions of gains, after an analyst forecast a swift supply increase and as top buyer India shut down a port over the weekends to contain the spread of COVID-19.

The benchmark palm oil contract FCPOc3 for July delivery on the Bursa Malaysia Derivatives Exchange lost 60 ringgit, or 1.5%, to 3,929 ringgit ($956.66) a tonne at the close.

The contract rose 5.7% for the week.

"Palm oil futures closed lower on weekend profit-taking following a slowdown in buying as margins are once again back in negative teritory due to very high palm oil prices," said Anilkumar Bagani, research head at Mumbai-based vegetable oil broker Sunvin Group.

A Kuala Lumpur-based trader said a leading industry analyst in a webinar warned that there was no new bullish factor for palm and that supply will expand fast.

He added the market was also reacting to a notice that the Kandla Liquid Tank Terminal Association, in the Indian state of Gujarat, has decided to shut terminal operations and tanker loading and unloading on the weekends to curb the spread of coronavirus infections.

Gains in rival oils on the Chicago Board of Trade (CBOT) and the Dalian Commodity Exchange had earlier supported palm prices, with the contract climbing 2.4% during the session.

Soybean oil BOc1 was up 0.1%.

Meanwhile on Dalian, soyoil contract DBYc1 rose 2.2%, while its palm oil contract DCPc1 gained 2.7%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Earlier forecast of tight palm supply had also propped up prices, as the Southern (NYSE: SO ) Peninsula Palm Oil Millers' Association in Malaysia estimated production during April 1-20 will be unchanged from the previous month. = 4.1070 ringgit)

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