Palm oil books second weekly loss as weak demand weighs

Malaysian palm oil futures posted a second weekly loss onFriday, underpinned by poor demand and weakness in Dalian vegetable oils.

The benchmark palm oil contract FCPOc3 for February delivery on the Bursa Malaysia Derivatives Exchange slid 24 ringgit, or 0.62%, to 3,871 ringgit ($828.73) at closing.

The contract declined 0.49% this week. It recorded a 5.87% rise for November, reversing a two-month decline.

Palm oil demand from biodiesel players continued to be virtually non-existent, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

“Market players expressed uncertainty regarding when margins for biodiesel players might improve and when demand from this sector might return.”

Palm oil is used as feedstock to make biodiesel.

Exports of Malaysian palm oil products in November were estimated to be up between 2% and 11% from the previous month, data from surveyors Intertek Testing Services and AmSpec Agri Malaysia showed on Thursday.

In related oils, Dalian’s most-active soyoil contract DBYcv1 fell 1.58%, while its palm oil contract DCPcv1 was down 1.62%.

Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.02%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

The Malaysian ringgit MYR=, palm’s currency of trade, weakened 0.3% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Source: Reuters (Reporting by Danial Azhar; Editing by Sonia Cheema and Sohini Goswami)