Palmetto slips but still posts weekly gains to end two-week decline
Malaysian palm futures ended lower on Friday due to weaker soyoil and concerns about overproduction. However, the contract posted a weekly gain after two consecutive weeks of losses.
At the close, the benchmark 'palm oil' contract for May delivery at Bursa Malaysia derivatives Exchange fell 27 ringgit or 0.66% to 4,090 Ringgit ($1,048.72).
This week, the contract increased by 0.99%.
Anilkumar bagani, commodity researcher at Mumbai-based Sunvin Group, says that the market will be focusing on palm oil export data from February 1-20, as well as production data including full-month estimations.
Cargo?surveyors estimate that exports of Malaysian products containing palm oil for the period February 1-20 decreased between 8.9% and 12.6%.
Bagani stated that "a sharp decline in South American soyoil prices has also led to a fall in palm oil prices. The absence of Chinese markets as well as concern about an early palm harvest in Malaysia and Indonesia before Ramadan also contributed."
He added that aggressive selling by Indonesians to avoid extra March export duties also contributed to the downward pressure on palm oils prices.
Prices of soyoil on the Chicago Board of Trade were down by 1.02%. Dalian Commodity Exchange will be closed during the Lunar New Year holiday.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing?edible?oils.
Oil prices rose on Friday to their highest level in six months, pointing towards the first weekly increase in three weeks. This was due to growing fears that a conflict could erupt following Washington's statement that Tehran would?suffer? if it did not reach a deal in days regarding its nuclear activities.
Palm oil is a more attractive feedstock for biodiesel due to the increased crude?oil prices.
The palm currency, the?ringgit (RMB), rose 0.13% to the dollar. This made the product slightly more expensive for foreign buyers. ($1 = 3.9000 ringgit)
(source: Reuters)
