Palm oil set for near 7% weekly gain
[KUALA LUMPUR] Malaysian palm oil futures fell on Friday as some investors booked profits after a four-day rally, though the market was set for a weekly gain on hopes of demand improving ahead of the Muslim holy month of Ramadan.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange slid RM49, or 1.9 per cent, to RM2,475 (US$591.40) by the midday break.
The market took a breather after hefty gains and ahead of the Malaysian Palm Oil Board data due on Tuesday, said Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics, referring to monthly supply and demand figures released by the industry regulator.
"Lower Dalian and weakness in equity markets also weighed down on palm futures," he added.
Prices of rival oils fell after sentiment was hit by a slump in global stocks as disruptions to business from the coronavirus worsened.
Dalian's most-active soya bean oil contract fell 1.3 per cent, while its palm oil contract slid 0.9 per cent. Soya bean oil prices on the Chicago Board of Trade were also down 0.7 per cent.
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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
However, the commodity is poised to gain 6.7 per cent for the week, rebounding after three straight weeks in the red.
Malaysia's palm oil exports for March 1-5 dropped 38 per cent from a month earlier as top buyers India and China reduced purchases, according to cargo surveyor Intertek Testing Services.
While India is not buying due to restrictions on refined palm oil, an escalation in coronavirus cases globally has raised concerns of lower demand.
Malaysian palm oil inventories in February likely dropped 1.4 per cent to 1.7 million tonnes from January, their lowest since June 2017, a Reuters survey showed on Thursday.
Palm oil may drop to RM2,431 per tonne, as it failed to break a resistance at RM2,592, Reuters technical analyst Wang Tao said.
REUTERS
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