JAKARTA: Malaysian palm oil futures dropped on Friday and posted their first weekly loss in three weeks, as weaker rival oils and expectation of sluggish exports weighed on prices.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange ended 0.27% lower to close at 3,703 ringgit ($841.59) per tonne.

It lost 2.40% for the week after two straight weekly increases.

“Selling interest still persist today, as physical side rival vegetable oils are trading lower compared to palm,” a Kuala Lumpur-based trader told Reuters.

“The contract rose earlier this week after Indonesia planned to raise its April 16-30 CPO reference price, which would put the export tax and levy higher. Overall market sentiment is still on the downside,” the trader added.

Dalian’s most-active soyoil contract dropped 0.78%, while its palm oil contract eased 0.86%. Soyoil prices on the Chicago Board of Trade were trading 0.46% lower.

Palm drops for second day tracking weaker rival oils

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

Meanwhile, traders were monitoring exports data after shipments of Malaysian palm oil products for April 1-10 fell between 16.2% and 35.6% from a month earlier, cargo surveyor data showed earlier this week.

Across Indonesia and Malaysia, which together produce 85% of the world’s palm oil, growers are ramping up replanting after a decade of letting estates grow older, an ageing trend that threatens to tighten supply of the commodity that accounts for nearly 60% of global vegetable oil.

Palm oil may bounce more to 3,797 ringgit per tonne, following its stabilisation around a support of 3,671 ringgit, said Reuters technical analyst Wang Tao.