KUALA LUMPUR: Malaysian palm oil futures staged a rebound and settled higher on Friday, although the benchmark contract logged a second consecutive annual loss.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 5 ringgit, or 0.13%, to 3,744 ringgit ($815.69) at closing. It lost 10% for the year.
Malaysian palm oil was unable to sustain gains because of a stronger ringgit and fear of deteriorating demand, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
“The contract also tracked weakness in Dalian vegetable oils and crude oil prices,” Saiya said.
The ringgit rose 0.33% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Exports of Malaysian palm oil products from Dec. 1-Dec. 25 were estimated to be down between 4% and 16% from the previous month, according to data from surveyors Intertek Testing Services and AmSpec Agri Malaysia.
Palm oil extends gains on support from rival oils
Dalian’s most-active soyoil contract fell 1.9%, while its palm oil contract slipped 2.13%. Soyoil prices on the Chicago Board of Trade were up 0.06%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices are set to end 2023 about 10% lower, the first annual decline in two years, after geopolitical concerns, production cuts and global measures to rein in inflation triggered wild fluctuations in prices.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Malaysia maintained its January export tax for crude palm oil at 8% and raised its reference price.
Indonesia on Friday lowered its crude palm oil reference price for the Jan. 1-15 period to $746.69 a metric ton from $767.51 per ton.
The El Nino weather phenomenon, which brought dryness to large parts of Asia, capped losses in the market this year. Dry El Nino weather is forecast to continue into the first half of 2024, putting at risk global palm oil production.
Comments
Comments are closed.