Palm dips to second weekly loss as crude, soyoil weigh

KUALA LUMPUR: Malaysian palm oil futures slipped on Friday, logging a second straight weekly decline, as weaker crude oil prices and Chicago soyoil pressured prices.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange shed 44 ringgit, or 0.98%, to 4,451 ringgit ($1,126.84) a metric ton, the lowest closing price since March 10. The contract declined 1.92% for the week.

The market traded lower on weaker crude oil and soybean oil prices during Asian hours, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

Dalian’s most-active soyoil contract rose 0.46%, while its palm oil contract added 1.26%. Soyoil prices on the Chicago Board of Trade were down 0.54%.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Crude oil prices fell on renewed hopes that the war in the Middle East could be nearing an end amid a 10-day ceasefire between Lebanon and Israel and signals that the U.S. and Iran could engage in further talks over the weekend.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.05% against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.

Malaysia’s palm oil–based biodiesel consumption is set to rise by more than 300,000 metric tons annually, the Malaysian Palm Oil Board said, as the country joins top producer Indonesia in raising blending mandates to reduce reliance on energy imports.