KUALA LUMPUR: Malaysian palm oil futures were rangebound on Friday, as weakness in related edible oils and US-China trade friction concerns dented sentiment, but prices edged higher at the end of the trading day.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,196 ringgit ($538.24) a tonne at the close of trade. The market gained 0.5 percent for the week.
Trading volume stood at 28,412 lots of 25 tonnes each on Friday evening.
“The market is bearish on overnight weakness in rival oilseeds and the current drop in China palm olein on escalating trade tensions between the United States and China,” said a futures trader from Kuala Lumpur.
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“A lack of positive market-moving news, however, is likely to cap palm’s upside.”
China said on Thursday it would retaliate if the United States acted on a threat to raise tariffs on the Asian nation’s exports, fuelling fears in markets that the trade war between the world’s two biggest economies would escalate.
US President Donald Trump had earlier instructed trade officials to look at increasing tariffs to 25 percent from 10 percent on $200 billion of Chinese imports.
The Chicago December soybean oil contract ended 1.2 percent lower on Thursday, in line with the oilseed’s losses over the US-China trade concerns, but was last seen 0.03 percent firmer.
Meanwhile, the September soybean oil contract on China’s Dalian Commodity Exchange fell 0.5 percent and the Dalian September palm oil contract slid 0.8 percent.
Palm oil prices are influenced by the performance of other edible oils as they compete for a share in the global vegetable oils market.
Palm oil is expected to drop to 2,149 ringgit per tonne, following its failure to break a resistance at 2,218 ringgit, said Wang Tao, a Reuters market analyst for commodities and energy technicals.
Source: Brecorder
