Palm oil slips as Dalian oils and Indonesian export worries weigh.

Malaysian palm oil futures fell for the second session in a row?on Friday. Pressured by Dalian oils' weakening and worries?over Indonesia’s new export system. Lower production?expectations also offered some support. The benchmark August palm oil contract on the Bursa Derivatives exchange fell 33 ringgit or 0.72% to 4,568 Ringgit ($1,132.37), a metric tonne, by midday.

The contract has already risen 0.51%, indicating a third consecutive weekly gain.

Anilkumar?Bagani, head of commodity research at Mumbai-based Sunvin 'Group, said that the?market was lower on Friday as a result of soaring prices for Chinese vegetable oil. This weakness is further exacerbated by aggressive palm oil sales in Indonesian cash markets ahead of the full implementation of the new export system. Indonesia released a long-awaited regulation on Friday to bring the export of its strategic commodities including palm oil under central government control. The move was intended to boost state earnings and stabilize its currency. The policy transition period began on June 1 and its full implementation is planned for next year.

Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He added that expectations for lower production in May are further cushioning the market.

Dalian's palm oil contract lost?2.76%, while the most active soyoil contract dropped 1.5%. Chicago Board of Trade soyoil prices were up by?0.13%.

As palm oil competes to gain a share in the global vegetable oils market, it 'tracks' the price movement of competing edible oils.

The palm ringgit's trade currency, the dollar, fell 0.6%, making it cheaper for foreign buyers. After Hezbollah refused a new ceasefire proposal in Lebanon and Oman's Mina al Fahal oil terminal suspended loading after an explosion, oil prices increased, reversing the sharp declines of the previous session. Palm oil is more appealing as a biodiesel source because crude oil futures are stronger.

(source: Reuters)