Palm oil tracks rivals lower, posts 2.8% weekly drop
Malaysian palm oil futures on Friday tracked a slump in rival edible oils to post its biggest one-day drop in a month and logged a weekly loss amid concerns over sluggish demand.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives fell 3.86% to 3,987 ringgit ($844.70) by closing, its biggest decline since Sept. 28.
The contract lost 2.78% over the week.
“Lower crude oil, weaker bean oil on CBOT and over 300 points losses on Dalian was enough to tip the palm market into deep red,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
“Weekend profit taking was also in play,” he added.
Dalian’s soyoil contract for January delivery DBYv1 fell 3.74%, while its palm oil contract DCPv1 dropped 3.72%. Soyoil prices on the Chicago Board of Trade BOc2 lost 0.68%.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
Meanwhile, crude oil prices fell on Friday after China, the world’s top crude oil importer, widened its COVID-19 curbs, but were poised for a weekly gain on supply concerns ahead of Europe’s pending cut-off of Russian imports. O/R
Weaker crude oil prices makes palm oil less attractive as alternative source of fuel.
Source: Reuters (Reporting by Fransiska Nangoy; Editing by Neha Arora and Maju Samuel)