Palm oil losses on stronger ringgit and rival weakness; palm oil ends the week down 3%
Malaysian palm oils futures dropped on Friday due to a stronger ringgit and the weakness of rival Dalian edible oil. This was their first loss in three weeks.
The benchmark "palm oil" contract for February delivery at Bursa Derivatives Malaysia Exchange dropped 45 ringgit or 1.11% to 4,018 Ringgit ($981.68) per metric ton, its lowest close since November 25.
The contract fell 3.23% in the last week.
A Kuala Lumpur-based Trader said that the weakening of rival oils and a stronger Ringgit had a negative impact on palm prices.
Palm oil prices on the Dalian Commodity Exchange fell 1.27%, while soyoil prices dropped 0.5%. Chicago Board of Trade soyoil prices fell 0.35%.
As palm oil competes to gain a share of the global vegetable oils markets, it 'tracks' price changes in rival edible oils.
Two traders reported that China's stockpiler of state reserves Sinograin had sold the majority of soybeans in an auction. This cleared space for an influx of U.S. shipments amid an abundance of local supplies.
The palm?ringgit has strengthened by 0.37% against U.S. dollars, making it more expensive for holders of foreign currencies.
The oil prices increased on Friday due to concerns about Venezuelan supply disruptions. However, they remain on course for a weekly drop as the focus remains on a potential Russia-Ukraine pact and a glut of supply.
Palm oil is more attractive as a biodiesel feedstock because crude oil futures are stronger.
AmSpec Agri Malaysia, an independent inspection company, reported that exports of palm oil products from Malaysia for the period?December 1-10 were down 10.3% compared to a month ago. Intertek Testing Services reported a 15% drop in exports for the same time period. Reporting by Dewi Kurianawati, Editing by Subhranshu and Harikrishnan Nair.
(source: Reuters)
