Palm oil prices fell on Friday
Palm oil prices fell after data from cargo valuation firm AmSpec Agri Malaysia showed a monthly drop in exports from February 1 to 20. A note from Kenanga Futures noted that weak export data and profit-taking during the Lunar New Year holiday likely weighed on prices.
Malaysian palm oil futures closed lower on Friday, weighed down by a weak soybean oil market, concerns about oversupply, and sluggish export demand, although the contract still posted a weekly gain after two consecutive weeks of declines.
The benchmark FCPO1 palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange fell 27 ringgit, or 0.66%, to 4,090 ringgit (US$1,048.72) per metric tonne at the close.
This week, the contract rose 0.99%.
According to Anilkumar Bagani, head of commodity research at Mumbai-based Sunvin Group, the market is focused on palm oil export data for February 1-20, as well as production forecasts for the full month.
According to cargo experts, Malaysian palm oil exports fell by 8.9-12.6% between February 1-20.
“A sharp decline in the benchmark soybean oil price in South America also led to a drop in palm oil prices, while the lack of Chinese markets, as well as concerns about early palm oil harvests in Malaysia and Indonesia ahead of Ramadan, also contributed to the decline,” Bagani said.
He added that potential aggressive selling by Indonesian exporters seeking to avoid additional export duties in March also contributed to the decline in palm oil prices.
Soybean oil prices on the Chicago Mercantile Exchange fell 1.02%. The Dalian Commodity Exchange is closed for the Lunar New Year holiday.
Palm oil prices are tracking those of competing edible oils as they compete for share of the global vegetable oil market.
On Friday, oil prices hovered near six-month highs, heading for their first weekly gain in three weeks amid growing concerns about a potential conflict following Washington’s announcement that Tehran will suffer if it fails to reach an agreement on its nuclear program within days.
Higher crude oil futures prices are making palm oil a more attractive option for biodiesel production.
The ringgit rose 0.13% against the dollar, making the commodity somewhat more expensive for buyers holding foreign currency.
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