Malaysian palm oil logs weekly loss on firmer ringgit, weak demand

KUALA LUMPUR: Malaysian palm oil futures reversed earlier gains on Friday, as a firmer ringgit and weak demand from key markets weighed on prices, while it logged a weekly loss.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 0.79% to 3,880 ringgit ($911.23) a metric ton at the close. The contract fell 4.36% this week.

A stronger ringgit and absence of enthusiastic buying amidst expectations of an increase in Malaysian April palm oil inventories limited the gains, said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.

Soyoil prices on the Chicago Board of Trade were down 0.72%. The Dalian Commodity Exchange is closed from May 1 to May 5 for the Labour Day holidays.

Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices fell as traders squared positions ahead of an OPEC+ meeting and amid some scepticism about a potential de-escalation of the trade dispute between China and the United States.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 1.25% against the US dollar in Friday trading as of 1055 GMT, making the commodity more expensive for buyers holding foreign currencies.