JAKARTA: Malaysian palm oil futures declined on Friday on easing supply concerns, as weather improved in the world’s second-largest producer Malaysia; however, the contract rose for a second week.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange lost 3 ringgit, or 0.06%, to 5,132 ringgit ($1,161.87) a metric ton at closing.
The contract rose 2.29% for the week.
“The rains have stopped at least for now, thus the damage is not widespread,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
A devastating flood hit Malaysia last week following heavy rain in late November and the country’s meteorological department earlier this week forecast monsoon surge from Dec. 8 to 14, which could bring continuous rain to the east coast of Malaysia’s peninsular and parts of Sabah and Sarawak states on Borneo island.
Palm rangebound on rival’s weakness, forecasts of lower end-Nov stocks
The contract is also easing as demand – especially for January – is seen as minimal, he added, while market participants are waiting for more direction from Malaysian Palm Oil Board data on November performance.
Dalian’s most-active soyoil contract was up 0.36%, while its palm oil contract fell 0.41%. Soyoil rose 1.25% at the Chicago Board of Trade.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysia’s palm oil inventories are expected to have fallen in November for a second consecutive month as torrential rains disrupted production, a Reuters survey showed.
Palm oil is expected to gain further into the 5,202-5,242 ringgit per ton range, driven by a wave 5, Reuters technical analyst Wang Tao said.
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