JAKARTA: Malaysian palm oil futures posted a weekly drop on Friday as rival oils traded lower amid fears of surging COVID-19 cases in China while tepid export data also weighed on sentiment.

Palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 23 ringgit, or 0.59%, to close at 3,917 ringgit ($885.80) per tonne on Friday. The contract lost 1.95% for the week.

The contract opened higher in early trading hours, supported by Indonesia’s plan to raise mandatory palm-based biodiesel blending to 35%, starting Jan. 1, and hits its highest in a week before paring gains.

“The prices unable to hold the big early gains and began sliding as Dalian Commodity Exchange refined, bleached and deodorised palm olein and soyoil futures seen trading sharply lower in Asian hours, feared a massive surge in China’s COVID-19 cases as government is no longer using the ‘zero-COVID’ policy,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Palm rose more than 5% earlier this week, supported by lower-than-expected inventories as Malaysian palm oil stock dropped for the first time in six months, but weak export data during Dec. 1-15 limited gains.

Palm oil drops due to soft export data

Exports of Malaysian palm oil products for Dec. 1-15 fell between 4% and 9.1% from a month earlier, cargo surveyors reported.

Dalian’s most active soyoil contract dropped 2.58%, while its palm oil contract fell 0.89%. Soyoil prices on the Chicago Board of Trade were down 1.48%.

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