Palm slips by more than 1% and records second weekly drop
Malaysian palm futures fell more than 1% Friday, marking a second consecutive weekly decline. Prices were pressured by a stronger ringgit and weaker edible oils.
The benchmark contract for palm oil?for?March delivery at the Bursa Derivatives Market in Malaysia fell 74 ringgit (1.86%) to 3,906 Ringgit ($958.76), its lowest closing rate since June 12. The contract is down 2.79% for the week.
A Kuala Lumpur based trader said that the main reason for the decline in crude palm oil prices was the 'weakness on the oilseeds markets where Dalian palm olein remains in the red?after overnight drops.
The trader said that "a firm ringgit around 4.08 is also keeping buyers away."
The palm ringgit's currency has strengthened by 0.17% against dollars, making it more expensive for buyers who hold foreign currencies.
Dalian's palm oil contract, which is the most active contract in Dalian, fell 1.33% while soyoil prices dropped 1.41%. Chicago Board of Trade soyoil prices were down by 0.23%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
Oil prices dropped and were on track for their second weekly drop as a possible supply glut and the prospects of a Russia/Ukraine peace agreement offset concerns over disruptions caused by a blockade against Venezuelan oil tankers.
Palm oil is less attractive as a biodiesel feedstock due to the weaker crude oil futures.
The Indonesian Palm Oil Association reported that despite an increase in production, Indonesian palm oil stocks fell by 10% at the end October compared to a month earlier.
Indonesia began road tests two week ago?
biodiesel
Energy Minister Bahlil lahadalia has said that B50 is a mixture containing 50% palm oils. The mandatory use of this mix will likely begin in the second quarter of 2026.
(source: Reuters)
