KUALA LUMPUR: Malaysian palm oil futures fell on Thursday, clocking the sharpest weekly decline of 10% in four months, weighed by a stronger ringgit and demand worries.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 177 ringgit, or 4.4%, to 3,845 ringgit ($845.05) a tonne.
Palm fell for a fourth consecutive session to its lowest closing in over a month.
Traders adjusted positions ahead of a long weekend, as Bursa Malaysia will be closed on Friday for a public holiday, a day before the country holds a general election.
“The strength in ringgit is putting a squeeze on refining margins,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, the downside to prices could be limited if the tropical storms in Malaysia worsen and hurt the quantity and quality of crude palm oil, he added.
The ringgit, palm’s currency of trade, has risen from its recent lows, making the edible oil cheaper for holders of foreign currencies.
Oil prices fell for a second straight day as concerns over geopolitical tensions eased, making palm a less attractive option for biodiesel feedstock.
Rising coronavirus infections in China, which is still following a strict zero-COVID policy, added to concerns over demand for edible oils and crude.
Dalian’s most-active soyoil contract fell 0.4%, while its palm oil contract eased 3.1%.
Soyoil prices on the Chicago Board of Trade were down 1.5%, extending an overnight plunge as the contract retreated from a five-month high set last week.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.