KUALA LUMPUR: Malaysian palm oil futures were little changed on Friday, as weak demand and the stronger ringgit weighed on the market, though expectations of tighter output provided support.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange slid 6 ringgit, or 0.14%, to 4,149 ringgit ($1,001.69) a metric ton at the midday break.
However, the contract is on track for a second weekly gain, rising 0.51% so far.
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 into 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 0.29% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Dalian’s most-active soyoil contract fell 1.04%, while its palm oil contract shed 1.03%. Soyoil prices on the Chicago Board of Trade were down 0.51%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices extended their decline for a third straight session as the US pushed for a Russia-Ukraine peace deal that could bring more oil supplies onto the global market, while uncertainty over US interest rate cuts curbed investor risk appetite.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may fall into a range of 4,076 ringgit to 4,102 ringgit per metric ton, driven by a wave (5), Reuters technical analyst Wang Tao said.
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