Palm slides nearly 2pc on weaker related oils

KUALA LUMPUR: Malaysian palm oil futures declined nearly 2 percent in early trade on Friday to their lowest in nearly a month, weighed down by weaker performing related edible oils.

Expectations of only a slight drop in April inventory levels also contributed to the bearish market sentiment, traders said.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was down 1.6 percent at 2,123 ringgit ($513.92) a tonne, its sharpest decline in two weeks.

It earlier fell to a low of 2,116 ringgit, its weakest levels since April 1, and is also down 3 percent for the week so far.

"Continuous weakness in palm's rival oilseed soy and China's palm olein is likely to spillover and pressure palm today," said a Kuala Lumpur-based trader, referring to soyoil on the US Chicago Board of Trade and palm olein on China's Dalian Commodity Exchange.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market.

Another trader added that Malaysia's April end-stocks are forecast to only slightly fall on the back of marginal gains in exports, adding to bearish market sentiment.

Malaysian palm oil exports rose between 1.4 percent and 8.9 percent during April 1-25 versus the corresponding period last month, according to data from three cargo surveyors on Thursday.

In other related oils, the Chicago May soybean oil contract fell 1 percent on Thursday, and was last down 0.3 percent.

Soybeans had remained on course for weekly drop as top South American producers, Brazil and Argentina, push their freshly-harvested bumper crops into the market.

Meanwhile, the May soyoil contract on the Dalian Commodity Exchange fell 1.6 percent, and the Dalian May palm oil contract was also down 1.6 percent.