VEGOILS-Palm oil posts 2% weekly fall on consolidation after recent uptick
22/03/2024 (Reuters), Singapore - Malaysian palm oil futures fell on Friday to mark its first weekly loss in five as it consolidated after a recent bullish episode, while lower edible and crude oil prices added to the decline.
The benchmark palm oil contract FCPOc3 for June delivery on the Bursa Malaysia Derivatives Exchange ticked down 62 ringgit, or 1.46% to 4,187 ringgit ($884.27) a metric ton at closing, the lowest close sinceMarch 13.
The contract lost 2.33% this week, its first weekly decline since Feb. 23.
The market is in a "consolidation mode" after a general uptick in prices since early March, which was "basically premised on supply constraints both in Malaysia and Indonesia", said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
While a gradual increase in palm production is anticipated moving forward, expectations of higher Indonesian tax and levy in April will likely keep prices supportive, Supramaniam added.
Dalian's most-active soyoil contract DBYcv1decreased 1.06%, while its palm oil contract DCPcv1lost 1.1%. Soyoil prices on the Chicago Board of Trade BOcv1fell 1.19%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices sank on the possibility of a nearing ceasefire in Gaza, which could ease geopolitical concerns in the Middle East, and as a stronger U.S. dollar and faltering U.S. gasoline demand weighed. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The Malaysian ringgit MYR=, palm's currency of trade, weakened 0.47% against the dollar.