JAKARTA: Malaysian palm oil futures traded lower on Friday as investors locked in profits, but posted a second straight weekly gain as concerns over a slowdown in production and strong exports supported prices.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange fell 0.20% to close at 4,988 ringgit ($1,192.73). Palm rose as much as 1.42% during the day before the rally lost steam.
The drop was most likely due to some profit taking after a 4.39% gain over two previous sessions, traders said. For the week, palm climbed 1.07%, extending the 1.13% gain last week. “There’s underlying strength due to good exports and lower production,” a Kuala Lumpur based palm trader said, adding the market was anticipating good exports data for Nov. 1-20 period which would be released soon.
Exports from the world’s second-largest producer during Nov. 1-15 jumped as much as 29% from the previous month, cargo surveyors said earlier this week.
Meanwhile, Malaysia’s palm oil production is expected to slow down as the peak season ends while the monsoons bring in more rainfall.
In related oils, Dalian’s most-active soyoil contract gained 1.04%, while its palm oil contract rose 2.97%. Meanwhile, soyoil prices on the Chicago Board of Trade fell 0.93%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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