KUALA LUMPUR: Malaysian palm oil futures edged lower on Friday, retreating from a two-week high hit in the previous session and declining for a second straight session, as concerns over rising inventory levels weighed on the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was down 0.3 percent at 2,144 ringgit ($517.87) at the midday break. It hit its highest level in two weeks at 2,181 ringgit on Thursday.
Palm has gained 1.1 percent so far this week, heading for a third weekly gain in four. Trading volumes stood at 8,109 lots of 25 tonnes each at Friday noon. <1FCPO-TOT> "The market is concerned over prospects of high stocks," said a Kuala Lumpur-based trader, referring to end-December inventory levels in the world's second-largest producer and exporter.
Industry regulator the Malaysian Palm Oil Board (MPOB) will release next Thursday production, exports and inventory data for December. Malaysian stockpiles at end-November had climbed 10 percent to 3 million tonnes, the highest in at least 18 years.
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Traders said they expected December-end stocks to rise further.
In other related oils, the Chicago March soybean oil contract rose 0.2 percent, while the January soybean oil contract on the Dalian Commodity Exchange jumped 1.8 percent. Meanwhile, the Dalian January palm oil contract gained 1.3 percent.
Palm oil prices are impacted by changes in soyoil prices, as they compete for a share in the global vegetable oil market.
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