JAKARTA: Malaysian palm oil futures posted their first weekly drop in three as the contract fell for a second session on Friday, weighed down by weakness in Dalian vegetable oils and a better-than-expected output estimate.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 61 ringgit, or 1.54%, to 3,890 ringgit ($831.55) a metric ton at closing.
The contract lost 1.04% for the week, snapping two consecutive weeks of gains.
The Malaysian Palm Oil Association estimated the output for Nov.1- Nov.20 to have dropped 3.89% from the previous month, traders said.
The figure came in better than a double-digit drop expected by traders who expected the rainy season to hinder harvesting activities, a Kuala Lumpur-based trader said.
Palm extends losses on weaker Dalian vegetable oils, set for weekly drop
“This indicates that the production zone is not affected yet. That is a good trigger for profit-taking, while waiting for a new lead to rally,” the trader said.
However, market participants are still cautious about the rainy season, he added.
Malaysia maintained its December crude palm oil export duty at 8%, a circular on the Malaysian Palm Oil Board website showed.
Exports of Malaysian palm oil products during Nov. 1-20 were estimated to be down between 2% and 9% from the previous month, data from surveyors Intertek Testing Services, Societe Generale de Surveillance and independent inspection company AmSpec Agri Malaysia showed.
Indian buyers curtailed purchases of palm oil for December and January shipments due to rising prices and as refiners faced negative margins after making heavy imports in the past few months, industry officials said.
Dalian’s most active soyoil contract fell 1.02%, while its palm oil contract plunged 1.64%.
Palm oil prices are affected by soyoil prices as they compete for a share in the global vegetable oil market.
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