Palm logs weekly losses; low demand puts pressure on the market

Malaysian palm futures rose marginally on Friday, but posted a loss for the week as profit-taking and weaker demand in major destination countries kept market pressure.

The benchmark contract for palm oil delivery in May on the Bursa Derivatives exchange gained 39 ringgit or 0.86% to 4,578 Ringgit ($1,030.38) per metric ton.

The contract has fallen by 1.02% this week.

Anilkumar bagani, the head of research for Mumbai-based Sunvin Group, says that crude palm oil is under pressure due to profit-taking, as it's forced to reduce its widening premium over other oils.

He said that the persistently dry demand for palm oil is also a cause of concern, particularly at a moment when exports have not improved.

Dalian's palm oil contract, which is the most active contract, gained 0.82% while soyoil rose by 2.02%. Chicago Board of Trade soyoil prices were up by 0.61%.

As palm oil competes to gain a share in the global vegetable oil market, 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 losses they suffered in the previous session of over 1%, partly because the prospects for a rapid end to the Ukraine conflict that could bring more Russian energy back to the market are diminishing.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency has weakened by 0.18% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies. ($1 = 4.4430 ringgit)

(source: Reuters)