JAKARTA: Palm oil closed lower on Friday and booked a second straight weekly loss due to weakness in Chicago soyoil futures and a persistently slower Malaysian palm oil export performance.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange lost 37 ringgit, or 0.84%, to 4,376 ringgit ($990.27) a metric ton at the close.
The contract had lost 4.37% this week.
“The futures were seen trading sideways today with prices opening lower, pressured by weakness in Chicago soyoil futures and a persistently slower Malaysian palm oil export performance,” said Anilkumar Bagani, head of research at vegetable oil broker Sunvin Group.
“However, prices were seen rebounding on hopes of a rejuvenation in destination demand, mainly from China and India.”
The two countries are the world’s top importers of palm oil.
According to independent inspection company AmSpec Agri Malaysia on Thursday, exports of Malaysian palm oil products for March 1-20 fell 5%. According to cargo surveyor Intertek Testing Services it fell 14.2%.
Dalian’s most-active soyoil contract fell 0.12%, while its palm oil contract gained 0.29%. Soyoil prices on the Chicago Board of Trade (CBOT) declined 0.44%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
A leading grains exchange in Argentina, the world’s largest exporter of soybean oil and meal, cut its forecast for the country’s 2024/2025 soybean crop by 1 million tons on Thursday as the impact of a drought becomes clearer.
Indonesia will raise its palm oil export levy to 4.5%-10% of the crude palm oil reference price from 3%-7.5% to finance a mandated increase in the amount of oil used in biodiesel, a plantation fund official said on Tuesday.
Oil prices rose in early Asian trading on Friday, and were set for their second consecutive weekly gains, after fresh U.S. sanctions on Iran and a new OPEC+ plan for seven members to cut output raised bets on tightening supply.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened to 0.11% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
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