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Malaysian palm oil futures posted a weekly drop despite ending higher on Friday amid sluggish demand from top buyer India and losses in Dalian vegetable oils. The benchmark palm oil contract FCPO1! for April delivery on the Bursa Malaysia Derivatives Exchange gained 7 ringgit, or 0.17%, to 4,193 ringgit a metric ton at closing.
Malaysian palm oil futures settled higher on Friday on bargain buying as prices have reasonably corrected from recent highs and the premium over soybean oil has been erased, said Anilkumar Bagani, commodity research head at vegetable oil brokerage Sunvin Group.
The contract fell to its lowest in more than three months earlier in the session. It lost 4.51% this week.
“Lower imports by top buyer India are a major concern for the palm oil market, especially as competition intensifies from cheaper soy-oil and rapeseed oil, which are attracting increasing demand,” a Mumbai-based dealer with a global trade house said.
Palm oil imports by India, the world’s biggest importer of edible oil, are set to plunge to a near five-year low in January on negative refining margins as the tropical oil’s premium over rivals drives buyers to more competitively priced soy-oil, government and industry officials told Reuters.
Exports of Malaysian palm oil products for Jan. 1-15 are estimated to have fallen between 15.5% and 23.7%, according to cargo surveyors Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Meanwhile, Indonesia is temporarily freezing the distribution of subsidies for mandatory palm oil biodiesel and re-planting programmes due to a reorganisation at its palm oil fund agency, an official said, while hoping the transition can be concluded as quickly as possible.
Dalian’s most-active soy-oil contract (DBYcv1) lost 1.17%, while its palm oil contract CPO1! fell 0.4%. Soyoil prices on the Chicago Board of Trade (BOc2) gained 1.08%.
Palm oil tracks price movements in rival edible oils as it competes for a share of the global vegetable oils market. Palm oil FCPOc3 may fall further into the 3,947-4,045 ringgit-per-metric-ton range, driven by a wave C, said Reuters technical analyst Wang Tao.
Source: Online/OFA
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