KUALA LUMPUR: Malaysian palm oil futures extended losses on Friday to hit a 10-day closing low, and logged a second weekly decline due to poor demand and weaker rival oils.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed down 67 ringgit, or 1.72%, to 3,831 ringgit ($866.35) a tonne. For the week, the contract has declined 2.2%.
A lack of demand from major buyer China, where palm oil inventories have surged and where COVID-19 infections have spiked following the abandonment of its zero-COVID policy, added pressure to the contract, Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, said.
Dalian’s most-active soyoil contract fell 2.1%, while its palm oil contract slipped 2.6%. Soyoil prices on the Chicago Board of Trade were up 0.4%.
In Malaysia, the world’s second-largest producer, flooding across the country is expected to disrupt harvesting and hit supply lines.
But production estimates for Dec. 1-20 by several industry groups did not show a more significant decline than the market had initially anticipated, Bagani said.
Its commodities minister accused the European Union of blocking market access of the edible oil with a new law that prevents the sale of commodities linked to deforestation, and said it will adversely impact the global supply chain.
Bursa Malaysia will be closed on Dec. 26 for Christmas holidays and will resume trading on Dec. 27.