SINGAPORE: Malaysian palm oil futures reversed early gains on Friday to log a fourth consecutive weekly loss, as weak exports data and softer rival oil contracts outweighed supply pressures from top producer Indonesia.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed down 16 ringgit, or 0.43%, at 3,680 ringgit ($831.07) a metric ton.
It lost 1.79% for the week. Palm oil futures were borrowing strength from expectations of Indonesia’s September palm oil export duties and levies to rise, but retreated due to weaker August palm oil exports and a persistent decline in Chicago soyoil futures, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for Aug. 1-15 fell 22.3% from the previous month, data from independent inspection company AmSpec Agri Malaysia showed on Thursday.
Cargo surveyor Intertek Testing Services said exports were down 20.2% during the same period. The pace of exports during the period faltered, compared to a previous decline of 12.2%-17.7% for Aug. 1-10, according to data from the two firms.
Soyoil prices on the Chicago Board of Trade shed 1.27%, decreasing for the fifth consecutive day. Dalian’s most-active soyoil contract lost 0.22%, while its palm oil contract ticked up 0.21%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm prices are now a tad more expensive versus soybean oil, thus there are worries about demand, said Lingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“Overall, prices will move in a range and remain resilient given that Indonesia’s August production is not really growing as much as anticipated by many,” he said.
The Malaysian ringgit, palm’s currency of trade, inched lower by 0.1% against the dollar, after rallying sharply from mid-July till last week. A stronger ringgit makes palm oil less attractive for foreign currency holders.
Comments
Comments are closed.