JAKARTA: Malaysian palm oil futures reversed earlier gains and fell on Friday, as the contract tracked losses in rival soyoil at the Chicago exchange and booked a second weekly decline.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange lost 11 Malaysian ringgit, or 0.25%, to 4,424 ringgit ($1,052.33) a metric ton, at the close.
The futures lost 0.47% for the week.
Dalian’s most-active soyoil contract rose 0.26%, while its palm oil contract decreased 0.3%. Soyoil prices on the Chicago Board of Trade (CBOT) BOcv1 fell 0.31%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Meanwhile, Malaysia has raised its October crude palm oil reference price to a level that maintains the export duty range at 10%, a statement by the Malaysian Palm Oil Board showed on Friday.
In Brazil, farmers are expected to increase the country’s soybean output in the new season, producing nearly 178 million metric tons, Brazilian crop agency Conab said on Thursday.
According to cargo surveyor Intertek Testing Services, exports of Malaysian palm oil products for September 1-15 rose 2.6% compared to August 1-15, while according to independent inspection company AmSpec Agri Malaysia, they fell 0.1%.
Oil prices dropped on Friday as worries over fuel demand outweighed expectations that the year’s first interest rate cut by the U.S. Federal Reserve would trigger more consumption.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit palm’s currency of trade, weakened 0.24% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
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