Malaysian palm oil futures ended Friday's trading lower, posting its eighth consecutive weekly loss as another wave of China growth worries hit global commodity markets. Palmoil has fallen nearly 13 percent in the past eight weeks, hurt by worries about higher production, slowing import demand in China and a global commodities rout.
The benchmark palm oil contract for November on the Bursa Malaysia Derivatives Exchange erased the small gain made in morning trade to close 0.6 percent weaker at 1,986 ringgit ($475.92) a tonne, its lowest close in nearly a year. Traded volume stood at 49,668 lots of 25 tonnes each at the close, well above the roughly 35,000 lots traded daily.
"All edible oils are very weak. Palm is still holding at the back because of the ringgit," said trader a with foreign commodities brokerage in Kuala Lumpur. Activity in China's factory sector shrank at its fastest in almost 6-1/2 years in August as domestic and export demand dwindled, a private survey showed, adding to worries the world's second-largest economy may be slowing sharply.
Meanwhile, Malaysian ringgit, the currency used to price the palm oil benchmark, fell to a new 17-year low, providing cushion to palm's decline. The ringgit is the worst performing currency in the region, losing more than 15 percent this year. US September soyoil was down 0.9 percent in late Asian trade, while the most active soybean oil contract on the Dalian Commodity Exchange fell 2.5 percent. US oil prices headed for their eighth consecutive week of falls on Friday, the longest losing streak since 1986.
In Indonesia, another major palm exporter, crude palm oil exports likely slumped 20 percent to a four-month low in July due to Ramadan holidays and a new levy on shipments, although output at the top producer continued to climb for a fifth month, a Reuters survey showed.
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