MUMBAI: Malaysian palm oil futures fell on Friday, ending the week with nearly 2% losses as mounting concerns over exports of the tropical oil from the second-biggest exporter, Malaysia, prompted traders to ignore lower stocks.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed down 12 ringgit, or 0.31%, at 3,809 ringgit ($797.20).
The contract fell 1.9% for the week after rising 3.12% in the last week.
“Weak exports are putting pressure on prices. Exports in February could fall below 1 million tons and further depress prices,” said Chandran S, futures broker at Kuala Lumpur-based CGS International.
Exports of Malaysian palm oil products for Feb. 1-15 fell by 10.8% to 17% from the previous month, two cargo surveyors reported on Thursday.
Cargo surveyor Societe Generale de Surveillance (SGS) on Friday said the exports during Feb. 1-15 totalled 492,654 metric tons, down from 514,890 tons during the first fortnight of January.
Malaysian palm oil futures edge up on lower inventories
Soyoil prices on the Chicago Board of Trade were down 0.3%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia’s palm oil stocks fell more than expected to their lowest level in six months by the end of January as production plunged to the lowest level in nine months amid steady exports, the industry regulator said on Tuesday.
The rebound in palm oil prices is likely to be capped by abundant supplies of rival soyoil and sunflower oil, “soft” oils that are available at discounts to tropical palm oil for the first time in more than a year.
Palm oil could continue its decline into a range of 3,745 ringgit to 3,765 ringgit per metric ton. The steep drop from the Feb. 15 high of 3,965 ringgit suggests a potential extension of the downtrend from the Jan. 26 high of 4,036 ringgit.
Comments