JAKARTA: Malaysian palm oil futures dropped on Friday, tracking a fall in rival edible oils, and were on track to post weekly losses due to concerns over sluggish demand.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives fell 2.41% to 4,047 ringgit ($857.60) per tonne by midday break.
The contract has lost 1.32% so far this week.
“Lower crude oil, weaker bean oil on CBOT and over 300 points losses on Dalian was enough to tip the palm market into deep red,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics. “Weekend profit taking was also in play,” he added.
Dalian’s soyoil contract for January delivery fell 3.76%, while its palm oil contract dropped 3.57%.
Soyoil prices on the Chicago Board of Trade lost 0.32%. Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
Palm oil may retest support of 4,114 ringgit
Meanwhile, crude oil prices fell on Friday after China, the world’s top crude oil importer, widened its COVID-19 curbs, but were poised for a weekly gain on supply concerns ahead of Europe’s pending cut-off of Russian imports.
Weaker crude oil prices makes palm oil less attractive as alternative source of fuel.
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