VEGOILS - Palm extends its losses but still manages to post a third weekly gain

Malaysian palm oils futures continued to lose a lot of money 'on Friday. They were weighed down by Dalian oil, which was weaker, and the new export system in Indonesia. However, they still managed to make a 'third consecutive weekly gain.

The benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for August delivery fell 47 ringgit or 1.02% to 4,554 Ringgit ($1,131.43) per metric ton.

This week, the contract increased by 0.42%.

Anilkumar bagani, head of commodity research at Mumbai-based Sunvin Group, said that the market was lower because of a sale of?Chinese vegetable oil futures. The weakness was further intensified by aggressive Indonesian palm oil sales ahead of the start of the new export system.

Indonesia released a highly anticipated regulation on Friday, which brought?exports? of strategic commodities including palm oil under the?control of central government. The move was intended to?increase state earnings and stabilise its currency. The policy transition period began on June 1 and its full implementation is planned for next year.

Paramalingam Supramaniam added that the market was further cushioned due to expectations of lower production in May.

Dalian's palm oil contract, which is the most active contract, fell by 3.29%. Prices of soyoil on the Chicago Board of Trade rose by 0.09%.

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

The palm ringgit's currency of trade has weakened by 0.37% against dollars, making it cheaper for buyers with foreign currencies.

Oil prices fell after Oman announced that operations at the port of Mina al 'Fahal were going as usual, following a report stating that oil 'loadings' had been suspended due to an explosion.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. $1 = 4,0250 ringgit (Reporting and editing by Ashley Tang, Eileen Soreng, and Sahal Muhammad)

(source: Reuters)