JAKARTA: Malaysian palm oil futures fell for a third straight day on Friday and was heading for the worst weekly session in six weeks, as rising Indonesian exports and an expectation of improving output dragged prices lower.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 1.30% to 5,402 ringgit ($1,227.73) per tonne by midday break. For the week, palm has declined 8.75% so far.
“Concern on slow exports couple with rising shipment from Indonesia” impacted palm prices, a trader in Kuala Lumpur said, added by the worry of sharp increase in June production.
The world’s top palm oil exporter Indonesia has issued permits for shipment of more than 820,000 tonnes of the edible oil under its Domestic Market Obligation scheme and its export acceleration programme as of late Wednesday, a trade ministry official said.
Meanwhile, cargo surveyors this week reported a monthly decline in Malaysian palm oil products exports in the first half of June. Elsewhere, Dalian’s most-active soyoil contract fell 1.70%, while its palm oil contract fell 2.40%.
Palm oil reverses early gains as Indonesia set to retake market share
Soyoil prices on the Chicago Board of Trade erased its earlier gain to trader 0.37% lower. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may hover above a support at 5,394 ringgit per tonne, or bounce into a range of 5,571-5,702 ringgit, Reuters technical analyst Wang Tao said.