Palm on course for a weekly loss due to weak demand
Malaysian palm futures rose on Friday, after earlier falling. However, the market was still set to lose money for the week as profit-taking along with weak demand in key destinations countries kept it under pressure.
After touching an intraday minimum of 4,500 ringgit the benchmark May palm oil contract on Bursa Malaysia's Derivatives exchange gained 1 ringgit or 0.02% to 4,540 Ringgit ($1,021.83) per metric ton at the midday break.
This week, the contract has fallen by 2.08%.
Anilkumar bagani, the head of research for Mumbai-based Sunvin Group, explained that crude palm oil has seen a decline in price due to profit taking. It was forced to reduce its widening premium over other oils.
He said that the persistently dry demand for palm oil is a major concern at this time, particularly at a period when exports have not improved.
Dalian's palm oil contract, which is the most active contract, gained 0.77%. Chicago Board of Trade soyoil prices rose 0.7%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
On Saturday, cargo surveyors will release their estimates of exports for the period March 1-15.
The oil prices recovered some of the more than 1% loss they suffered in the previous session. This was partly due to the diminishing prospect of an end to the Ukraine conflict that would bring more Russian energy back.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, has weakened by 0.18%, making the commodity more affordable for buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil was likely to test resistance at 4,562 Ringgit per ton. A break above this level could lead to gains in the range of 4,601 to 4,641 Ringgit.
(source: Reuters)
