Malaysian palm oil futures were down at the midday break on Friday, set to chart a second week of losses, weighed down by weakness in related edible oils and crude oil. The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange declined 0.4 percent at 1,997 ringgit ($480.16) a tonne at the midday break.
It had fallen to a one-week low in its previous session, and is down 2.1 percent for the week so far. Trading volumes stood at 16,574 lots of 25 tonnes each at the midday break. "Continuous weakness in competing vegetable oils and the energy front is likely to weigh in and pressure palm prices," said a Kuala Lumpur based trader, referring to soyaoil on the US Chicago Board of Trade and China's Dalian Commodity Exchange.
Palm oil prices are impacted by movements in crude oil, as it is used as feedstock to make biodiesel. Oil prices fell on Friday, pulled down by OPEC's decision to delay a final decision on output cuts, awaiting support from non-OPEC heavyweight Russia.
Palm oil prices had been down for most of the week on expectations of stockpiles touching 3 million tonnes and as Indonesia officially implemented relaxed rules on its palm oil export levies. The move was to aid its oil palm farmers and boost exports, but would result in Malaysian palm oil being less price competitive.
In other related oils, the Chicago December soyabean oil contract was down 0.1 percent, while the January soyabean oil contract on the Dalian Commodity Exchange fell 1.8 percent. Meanwhile, the Dalian January palm oil contract declined 1.2 percent.
Palm oil is impacted by movements of other edible oils, as they compete for a share in the global vegetable oil market. A bearish target range of 1,956-1,972 ringgit per tonne remains unchanged for palm oil, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
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