JAKARTA: Malaysian palm oil futures opened lower on Friday, tracking weakness in rival Dalian vegetable oils, and were set for a weekly drop.
Malaysian palm oil futures lower after news on Indonesia’s B40 delay
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost 21 ringgit, or 0.48%, to 4,312 ringgit ($961.64) a metric ton by 0233 GMT. The contract has declined 6.96% so far this week.
Fundamentals
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Dalian’s most-active soyoil contract dropped 1.79% and its palm oil contract fell 2.13%. Chicago Board of Trade soyoil futures were down 0.02%.
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Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
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Indonesia has yet to implement a higher mandatory blend of biodiesel planned for Jan. 1 as industry participants await the technical regulations for the rollout, causing confusion among palm oil traders.
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Indonesia slightly lowered its crude palm oil (CPO) reference price for January to $1,059.54 a metric ton, from December’s $1,071.67, according to a trade ministry regulation published on Tuesday.
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Exports of Malaysian palm oil products for December fell 2.5%, according to AmSpec Agri Malaysia, while Intertek Testing Services said they declined 7.8%.
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Oil prices extended their gains on Friday after closing at their highest in more than two months in the previous session on hopes governments across the world may increase policy support to revive economic growth that would lift fuel demand.
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The ringgit, palm’s currency of trade, fell 0.2% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
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Palm oil may fall into a range of 4,231 ringgit to 4,263 ringgit per metric ton, as suggested by a projection analysis, Reuters’ technical analyst Wang Tao said.
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