KUALA LUMPUR: Malaysian palm oil futures closed at a near one-month low on Friday and logged a weekly decline as fresh COVID-19 curbs in China stoked worries about demand from the commodity’s top buyer.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange slid 93 ringgit, or 2.33%, to 3,901 ringgit ($870.37) a tonne, their lowest since Aug. 5.
For the week, the contract fell 6.5%.
Traders are turning their focus to production data for August ahead of a report by the Malaysian Palm Oil Board next week, with a focus on inventories, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Several market participants expect production to rise as the peak harvest months arrive, but they are also concerned that poor demand might lead to a build-up of stocks.
Palm ends at near one-month low on fears of higher supply
Adding to the fears, the southern Chinese tech hub of Shenzhen tightened COVID-19 curbs, while the southwestern metropolis of Chengdu announced a lockdown of its 21.2 million citizens.
Dalian’s most-active soyoil contract fell 4%, while its palm oil contract dropped 5.4%. Soyoil prices on the Chicago Board of Trade were up 0.8%.
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