After a steady three-month rise, international edible oil prices have witnessed a sharp downturn. Shankar Thakkar, president of the All India Edible Oil Traders Federation, reported that palm oil prices dropped by over 8% last week.
On Friday, Malaysian palm oil futures experienced their steepest weekly fall in 18 months, driven by declining demand and weaker competing soybean oil prices. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed at 4,640 ringgit ($1,039.19) per metric tonne, down by 132 ringgit or 2.77%.
The palm oil contract registered an 8.81% weekly decline, its largest since April 2023, marking two consecutive weeks of losses. Similarly, soybean oil prices also fell, with a 1.52% drop last week. On the Chicago Board of Trade, soybean oil prices decreased by 0.71%, while the palm oil contract fell by 1.3%.
In September, palm oil exports totaled 1.86 million tonnes, but shipments to major buyers like India and China dropped by more than a third.
Thakkar advised oil traders to exercise caution due to the ongoing price decline. He emphasized that the current price levels are more likely to decrease further than rebound, making careful trading essential to mitigate potential losses.