Palm oil books first weekly drop in five on weak rivals

JAKARTA: Malaysian palm oil futures posted a first weekly drop in five weeks, weighed down by weakness in rival edible oils in Chicago and Dalian markets.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange lost 53 ringgit, or 1.26%, at 4,153 ringgit ($1,052.72) a metric ton by the midday break. The contract lost 1.8% for the week.

“Bursa Malaysia crude palm oil futures traded lower following spread adjustments against rival oilseeds. Market participants adopting a cautious stance ahead of next week’s Malaysia Palm Oil Conference in Kuala Lumpur,” a Kuala Lumpur-based trader said.

Dalian’s most-active soyoil contract was down 0.44%, while its palm oil contract lost 1.02%. Soyoil prices on the Chicago Board of Trade declined 0.55%.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Malaysia’s palm oil inventories are set to end a 10-month rising streak in January, as exports jumped during a seasonal slowdown in production, a Reuters survey showed.

Palm oil may retest a support at 4,169 ringgit per metric ton, a break below could open the way toward the 4,116-4,148 ringgit range, said Reuters technical analyst Wang Tao.