Palm Oil Prices Slip On Profit-Taking, Weak Demand, Post Slight Weekly Loss

Malaysian palm oil futures fell on Friday and posted a slight weekly loss as traders booked profits ahead of a long holiday weekend, while a stronger ringgit and soft demand weighed on market sentiment.

The benchmark palm oil contract for November delivery on Bursa Malaysia Derivatives lost 9 ringgit, or 0.2%, to close at 4,445 ringgit ($1,058.33) a tonne.

The contract fell 0.07% over the week.

"Strength in the ringgit and the absence of fresh demand from import destinations, particularly India, pressured prices and pushed the market into negative territory," said Anilkumar Bagani, head of commodities research at Mumbai-based brokerage Sunvin Group.

Local media quoted Indonesian Energy Minister Bahlil Lahadalia as saying on Friday that Indonesia may raise the mandatory palm oil content in biodiesel to 45% (B45) before moving to B50.

Indonesia on Friday handed over 674,178 hectares (1.7 million acres) of palm oil plantations to state-owned Agrinas Palma Nusantara, bringing the total land area granted to the company to 1.5 million hectares (3.7 million acres).

A Kuala Lumpur-based trader said futures were seeing profit-taking after the recent rally, driven by weaker prices on the Dalian exchange, soft Malaysian Palm Oil Board (MPOB) data, slowing exports and the upcoming long holiday.

The market will be closed on 15 and 16 September for a public holiday.

Palm Oil Prices Rise, Supported By Strength In Rival Oils And Crude Oil

Malaysian Palm Oil Board data showed that Malaysia's palm oil stocks rose to a 20-month high at the end of August, while cargo surveyors said earlier this week that exports of Malaysian palm oil products fell between 1.2% and 8.4% in the 1-10 September period compared with the same period a month earlier.

The most-active soybean oil contract on the Dalian exchange (DBYcv1) and Dalian palm oil contracts rose 0.36% and 0.24% respectively in the latest trade. Soybean oil prices on the Chicago Board of Trade (CBOT) (BOc2) rose 0.25%.

Palm oil tracks the price movements of competing edible oils as it competes for a share of the global vegetable oils market.

The ringgit, palm oil's trading currency, strengthened 0.45% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

Reuters technical analyst Wang Tao said palm oil may extend its gains to 4,506 ringgit per tonne, as a flat price pattern could form.

Source: Reuters