Lang
Malaysian palm oil futures ended Friday more than 1% lower, ending a three-week rally as traders took profits and concerns grew over higher production amid weak demand.
The benchmark palm oil contract for October delivery on Bursa Malaysia Derivatives fell by RM54, or 1.25%, to close at RM4,276, equivalent to $1,013.75, per metric tonne.
The contract declined 0.9% for the week.
Paramalingam Supramaniam, director at brokerage Pelindung Bestari, said crude palm oil prices fell after the recent rally because of profit-taking.
He added that signs of production recovery alongside weak demand also contributed to the decline.
According to the Malaysian Palm Oil Board, Malaysia’s crude palm oil production is expected to rise to 19.5 million metric tonnes in 2025, compared with 19.3 million tonnes in the previous year.
Cargo surveyors estimated that Malaysian palm oil product exports during July 1–25 fell by between 9.2% and 15.2% compared with the previous month.
Paramalingam said the market is aware of the possibility of higher production in the third quarter.
He added that current demand trends suggest ending stocks could rise above 2.1 million metric tonnes in July unless demand improves.
In global markets, the most-active soybean oil contract on Dalian rose by 0.39%, while the palm oil contract fell by 0.95%.
Soybean oil prices on the Chicago Board of Trade declined by 0.41%.
Palm oil tracks rival vegetable oil prices because it competes for share in the global vegetable oils market.
Crude oil prices remained stable, as positive expectations around trade talks supported hopes for improved global economic activity and oil demand.
Higher crude oil futures can make palm oil more attractive as a feedstock for biodiesel production.
The Malaysian ringgit, the currency in which palm oil is traded, slipped 0.12% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.
Source: Reuters