Palmettos slips but still logs weekly gains

Malaysian palm futures closed lower on Friday as a result of sluggish export demand and expectations that stockpiles would increase. However, the contract managed to post its fourth weekly gain in five weeks.

At the close of trading, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery was down 8 Ringgit or 0.17% at 4,678 Ringgit ($1,144.32). The contract rose 0.75% in the past week. Anilkumar?Bagani, commodity research director at Sunvin Group, stated that crude palm oil futures traded lower due to estimates of increasing palm oil inventories in Malaysia, as well as?weak forward sales of shipments. Anilkumar Bagani, commodity research head at Sunvin?Group, said that a survey revealed that Malaysian palm oil inventories will rise to a five month?high by July as production growth exceeds robust demand.

On August 10, the Malaysian Palm Oil Board will release its demand and supply figures for July. Cargo surveyors will publish their estimates of palm oil exports from August 1-10 on the same date. The oil prices rose on the back of concerns about the reopening of the Strait of Hormuz, and Iranian sanctions and fines against vessels that it considers to be hostile or in breach of proposed rules.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Dalian's soyoil contract with the highest volume rose by 0.27% while palm oil contracts fell by 0.3%. Prices of soyoil on the Chicago Board of Trade rose by 0.25%.

Palm?oil monitors the price changes of competing edible oils as they compete to gain a share in?the global market for vegetable oils.

The palm?ringgit?, the currency of trade for the company, fell 0.02% in value against the U.S. Dollar, making it slightly cheaper to buyers with foreign currencies.

(source: Reuters)