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Wednesday, November 30, 2022

Palm logs weekly loss

KUALA LUMPUR: Malaysian palm oil futures clocked their first weekly fall in three on weak exports and expectations of higher production, although the contract ended slightly higher on Friday.

Investors expect the next week to be bullish for palm after Indonesia, the world’s largest palm oil producer, shocked the market with an announcement of a ban on exports.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange closed up 36 ringgit, or 0.57%, at 6,349 ringgit ($1,468.66) a tonne.

For the week, palm has declined 1.84%.

Indonesia will effectively ban shipments of cooking oil and its raw material to control domestic prices from April 28, President Joko Widodo said after the market closed on Friday.

This is expected to further throttle supply of a vegetable oil market already constricted by adverse weather conditions, labour shortages and the Russian-Ukraine war.

Malaysia, the world’s second-largest producer, kept its May export tax for crude palm oil at 8% and raised its reference price to 6,759.22 ringgit ($1,564.63) per tonne.

The market has priced in a higher stockpile outlook for April, based on better production and weaker exports, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Supporting the market, ringgit, palm’s currency of trade fell 0.79% against the dollar to its lowest since June 2020, making the commodity cheaper for holders of foreign currency.

In related oils, Dalian’s most-active soyoil contract gained 0.6%, and its palm oil contract fell 0.5%. Soyoil prices on the Chicago Board of Trade surged 2.7% following Indonesia’s announcement, extending a seven-day winning streak.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm logs weekly loss

Source: Brecorder

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