JAKARTA: Malaysian palm oil futures declined on Friday on easing supply concerns, as weather improved in the world’s second-largest producer Malaysia; however, the contract rose for a second week.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 3 ringgit, or 0.06%, to 5,132 ringgit ($1,161.87) a metric ton at closing.
The contract rose 2.29% for the week. “The rains have stopped at least for now, thus the damage is not widespread,” said Paramalingam Supramaniam ,director at Selangor-based brokerage Pelindung Bestari. A devastating flood hit Malaysia last week following heavy rain in late November and the country’s meteorological department earlier this week forecast monsoon surge from Dec. 8 to 14, which could bring continuous rain to the east coast of Malaysia’s peninsular and parts of Sabah and Sarawak states on Borneo island.
The contract is also easing as demand - especially for January - is seen as minimal, he added, while market participants are waiting for more direction from Malaysian Palm Oil Board data on November performance. Dalian’s most-active soyoil contract was up 0.36%, while its palm oil contract fell 0.41%.
Soyoil rose 1.25% at the Chicago Board of Trade. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysia’s palm oil inventories are expected to have fallen in November for a second consecutive month as torrential rains disrupted production, a Reuters survey showed.
Palm oil is expected to gain further into the 5,202-5,242 ringgit per ton range, driven by a wave 5, Reuters technical analyst Wang Tao said.
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