KUALA LUMPUR: Malaysian palm oil futures ended lower on Friday, as expectations of rising stockpiles and sluggish export demand pressured the market, though the contract still managed to post its fourth weekly rise in five weeks.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was down 8 ringgit, or 0.17%, at 4,678 ringgit ($1,144.32) a metric ton at close. The contract gained 0.75% for the week.
Crude palm oil futures traded lower amid estimates of rising palm oil stocks in Malaysia as well as weak forward sales of shipments, said Anilkumar Bagani, commodity research head at Sunvin Group.
A Reuters survey showed that Malaysia’s palm oil inventories are expected to rise to a five-month high in July, as production growth outpaces robust demand.
The Malaysian Palm Oil Board is expected to release its July demand and supply data on August 10, while cargo surveyors are due to publish their palm oil export estimates for the August 1-10 period on the same day.
Oil prices edged higher on further concerns surrounding the reopening of the Strait of Hormuz and potential Iranian bans and fines on vessels it deems hostile or in violation of proposed rules.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract rose 0.27%, while its palm oil contract shed 0.3%. Soyoil prices on the Chicago Board of Trade were up 0.25%.
Palm oil tracks price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.02% against the U.S. dollar, making the commodity slightly cheaper for buyers holding foreign currencies.