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Malaysian palm oil futures dropped more than 2% on Friday, erasing earlier gains to post a weekly loss, weighed down by soft demand and a stronger ringgit.
The benchmark palm oil contract for January delivery on Bursa Malaysia Derivatives fell 87 ringgit, or 2.09%, to close at 4,068 ringgit ($981.19) per tonne. The contract lost 1.45% over the week.
Paramalingam Supramaniam, a director at Selangor-based brokerage Pelindung Bestari, said sluggish demand and a firmer ringgit were putting pressure on prices.
However, Supramaniam added that output is slowly entering the seasonal low-production months, which is keeping prices supported at key levels. Cargo surveyors estimated that Malaysian palm oil product exports for 1-20 November fell between 14.1% and 20.5% compared with the previous month.
The ringgit, palm oil's trading currency, rose 0.19% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
In related markets, the most active soybean oil contract on the Dalian exchange fell 1.3%, while its palm oil contract dropped 2.24%. Soybean oil prices on the Chicago Mercantile Exchange also fell 1.47%.
Palm oil is influenced by price movements in competing edible oils, as it vies for a share of the global vegetable oil market.
More broadly, crude oil prices fell more than 1%, extending losses for a third consecutive session, as the United States pushed for a peace deal between Russia and Ukraine that could boost global supplies, while uncertainty over interest rates curbed investors' appetite for risk.
Source: Reuters