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Malaysian palm oil futures closed lower on Friday, posting a second consecutive weekly loss as weak export demand continued to weigh on the market. The benchmark palm oil contract for March delivery on Bursa Malaysia Derivatives fell 74 ringgit, or 1.64%, to close at 4,434 ringgit per tonne. The contract shed 9.6% over the week. Crude palm oil extended its losing streak amid persistently weak export demand, with this week's data showing a continued decline, according to a Kuala Lumpur-based trader. "The market believes exports will be lower over the next ten days as well," the trader said.
Cargo surveyors estimated that Malaysian palm oil product exports fell by between 7.6% and 8.3% during 1-20 December compared with the same period a month earlier.
Earlier in the session, the market managed to recoup some losses after Indonesia decided to raise export levies on crude palm oil. Indonesia's economy minister said on Thursday that the country would increase the crude palm oil export levy to 10% from the current 7.5% to fund higher biodiesel subsidies.
The most-active soyoil contract on the Dalian exchange rose 0.99%, while its palm oil contract fell 1.24%. Soybean oil prices on the Chicago Board of Trade also dropped 0.4%.
Palm oil tracks price movements of competing edible oils as it vies for a share of the global vegetable oils market. The ringgit, palm oil's trading currency, weakened 0.07% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices fell on concerns over 2025 demand growth, particularly in China, the world's top crude oil importer, putting global crude benchmarks on track to end the week down nearly 3%. Weaker crude oil futures made palm oil a less attractive option as a feedstock for biofuel production.
Source: Reuters