KUALA LUMPUR: Malaysian palm oil futures tumbled more than 2% on Friday, wiping out earlier gains to post a weekly loss, pressured by weak demand and a strong ringgit.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 87 ringgit, or 2.09%, to 4,068 ringgit ($981.19) a metric ton at the close. The contract fell 1.45% this week.
The tepid demand and the strength of the ringgit are putting pressure on prices, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
However, production is slowly entering lower output months, which is keeping prices supported at key levels, Supramaniam said.
Cargo surveyors estimated that exports of Malaysian palm oil products for November 1-20 fell between 14.1% and 20.5% from a month earlier.
The ringgit palm’s currency of trade, strengthened 0.19% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Dalian’s most-active soyoil contract fell 1.3%, while its palm oil contract shed 2.24%. Soyoil prices on the Chicago Board of Trade were down 1.47%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices fell more than 1%, extending declines for a third session as the United States pushed for a Russia-Ukraine peace deal that could swell global supply, while uncertainty over interest rates curbed investors’ risk appetite.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
American Dollar Exchange Rate