Palm extends its losses and records second weekly loss

Malaysian palm futures closed lower on Friday, and recorded a second weekly loss in a row due to sluggish demand for exports.

The benchmark contract for palm oil delivery in March on the Bursa Derivatives Market fell by 74 ringgit or 1.64% to 4,434 Ringgit per metric ton.

The contract fell 9.6% in the last week.

A Kuala Lumpur based trader said that crude palm oil's losses continued as the export demand was weak. This week's figures showed continued declines.

The trader stated that the market expects exports to fall for the next ten days.

Exports of palm oil products from Malaysia fell between 7.6% to 8.3% in the period Dec. 1-20 compared with a similar period last month.

Earlier in the session, following Indonesia's decision of raising its crude palm export tax, the market recovered some losses.

Indonesia's Chief Economic Minister said on Thursday that it would increase the export tax for crude palm oil from 7.5% to 10% to fund higher biodiesel subsides.

Dalian's soyoil contract with the highest volume of trading rose by 0.99% while palm oil contracts fell by 1.24%. Chicago Board of Trade soyoil prices were down by 0.4%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.

The palm ringgit's trade currency, the dollar, fell by 0.07%, making the commodity more affordable for buyers who hold foreign currencies.

Worries about the growth of demand in 2025, particularly in China, the world's largest crude importer, caused oil prices to fall. Global benchmarks are on course to finish this week with a drop of nearly 3%.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. (Reporting and editing by Ashley Tang, Subhranshu Sahu, and Varun H. K.)

(source: Reuters)