Malaysian palm oil futures dropped over 2 percent to their lowest in more than three years on Friday, tracking weakness in soyaoil and as concerns of a slowdown in exports weighed. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed 2.1 percent lower at 2,042 ringgit ($488.75) a tonne, charting a fourth straight session of declines.
Earlier in the session, it hit its lowest since September 2015 at 2,039 ringgit. Palm declined 5.2 percent this week, its biggest weekly decline since the week ended July 13. Trading volumes totalled 54,556 lots of 25 tonnes each in Friday's trade.
Palm oil is expected to fall further as weakness in competing vegetable oils continues, a Kuala Lumpur-based trader said. US soyabean futures slid for a fifth consecutive session and were poised to finish the week in negative territory as the market is facing renewed pressure after the US government raised its outlook for stocks.
The market was also pressured by expectations of lower exports in the first 10 days of this month, said another trader. In other related edible oils, the Chicago December soyabean oil contract fell 0.6 percent, while the January soyabean oil contract on the Dalian Commodity Exchange declined 0.8 percent.
Meanwhile, the January palm oil contract dropped 1.7 percent. Palm oil prices are affected by movements of other edible oils as they compete for a share in the global vegetable oil market.
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