JAKARTA: Malaysian palm oil futures closed lower on Friday, tracking weaker rival edible oils on the Dalian and Chicago exchanges, as well as crude oil, but still posted a weekly gain.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange fell 38 ringgit, or 0.77percent, to 4,898 ringgit (USD1,200.49) a metric ton at the close. The contract gained 1.74percent for the week.
“FCPO futures remained in negative territory on Friday, mirroring selling pressure across the broader commodity complex during Asian trading hours,” a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract fell 1.57percent, while its palm oil contract lost 2.14percent. Soyoil prices on the Chicago Board of Trade were down 0.77percent.
Palm oil tracks rival edible oils as it competes for a share of the global vegetable oils market. Market participants are monitoring an official announcement from the Indian government on a potential reduction in import tariffs, which could have implications for Malaysian palm oil demand, the trader said.
Oil prices fell 2percent on Friday, extending losses for a third straight session as easing concerns over Saudi supply disruptions outweighed concerns about a widening of conflict across the Middle East.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. Palm oil output in Indonesia’s major producing region, Kalimantan, could fall 12-15percent in the fourth quarter, with plantations hit by prolonged dry weather and widespread fires, an analyst said on Wednesday.
The ringgit, palm’s currency of trade, gained 0.49percent against the US dollar, making the commodity more expensive for buyers holding foreign currencies.