Palm oil suffers worst week in 19 months with 8% drop
Malaysian palm oil futures closed lower, logging their sharpest weekly fall in over a year and a half, amid concerns about weaker demand and declining soybean oil prices. The benchmark February palm oil contract fell 2.77% to 4,640 ringgit per metric ton, down 8.81% for the week. This drop was influenced by weakening oil prices and global demand fears, as well as a dip in rival edible oils, such as soybean oil. Additionally, a weaker ringgit made palm oil cheaper for foreign buyers.
KUALA LUMPUR: Malaysian palm oil futures closed lower on Friday to log their sharpest weekly fall in more than a year and a half, weighed down by looming demand worries and weak soybean oil prices.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange slid 132 ringgit, or 2.77%, to 4,640 ringgit ($1,039.19) a metric ton at the close.
The contract fell 8.81% this week, marking its second consecutive weekly decline and the largest weekly fall since April 2023.
Crude palm oil futures opened lower due to weakening soybean oil prices and concerns about weaker demand in the coming weeks, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract fell 1.52%, while its palm oil contract shed 1.3%. Soyoil prices on the Chicago Board of Trade slid 0.71%.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices inched higher on Friday, on track for a weekly rise of more than 4%, as the Ukraine war intensified, with Russian President Vladimir Putin warning of a global conflict.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.11% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
Indonesia’s palm oil stocks climbed in September as exports and domestic consumption declined, while output slightly improved, data from the main palm oil industry association GAPKI showed.
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Source Link : Business Recorder
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