KUALA LUMPUR: Malaysian palm oil futures were set for a second straight weekly gain, even as the market extended losses on Friday weighed down by worries that aggressive monetary tightening to curb inflation would spark a recession.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange had slid 21 ringgit, or 0.55%, to 3,805 ringgit ($832.79) a tonne by the midday break. For the week, the contract has risen 2.2% so far.
Macroeconomic worries hung over global equity and commodities markets a day after the US central bank hiked rates by 75 basis points for a third time, as expected, and raised its rate target to its highest since 2008.
Recession is worrisome but prices are in a comfortable zone and good edible oil demand from top buyers China and India has kept the contract supported, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Indonesia’s palm oil exports are set to jump in the second half of the year after the scrapping of export levies, but the annual total will still be lower than last year’s 33.7 million tonnes due to earlier restrictions, the Indonesian Palm Oil Association said on the sidelines of the Globoil Conference in Agra, India.
Dalian’s most-active soyoil contract fell 1%, while its palm oil contract DCPcv1 dropped 1.3%. Soyoil prices on the Chicago Board of Trade were down 1.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.