Palm extends losses to clock biggest weekly drop in four months
24.03.2023 (Business Recorder) - KUALA LUMPUR: Malaysian palm oil futures on Friday extended losses to a seventh session to log their biggest weekly drop in more than four months, tracking weakness in rival edible oils.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange fell 48 ringgit, or 1.34%, to 3,521 ringgit ($795.53) a tonne. The contract hit its lowest closing level since Oct. 4.
It has fallen 10.2% in the week, its biggest weekly drop since the week ended Nov. 18.
The sell-off in soybean oil, sunflower and rapeseed oils is putting pressure on palm oil prices, although estimates of lower production and end-stocks lent some support to the market, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“Palm oil prices have decoupled from fundamentals due to the overall global selling,” Paramalingam said. “It is extremely difficult to pinpoint when exactly the price recovery will occur, we need better overall demand to make that possible.”
Dalian’s most-active soyoil contract fell 0.5%, while its palm oil contract gained 0.3%. Soyoil prices on the Chicago Board of Trade were down 0.9%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Malaysia maintained its April export tax for crude palm oil at 8% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed on Thursday.
Oil prices fell on worries about potential oversupply after U.S. Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve may take several years.
Lower oil prices make palm oil a less attractive option as biodiesel feedstock.