Palm oil drops 8% in a week, the worst drop for 19 months.
Malaysian palm futures fell on Friday, their biggest weekly drop in over a year. Weak soybean oil prices and concerns about demand weighed them down.
At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for February delivery fell 132 ringgit or 2.77% to 4,640 Ringgit ($1,039.19).
This is the second weekly decline in a row and the biggest weekly drop since April 2023.
David Ng, a proprietary trading at Kuala Lumpur's Iceberg X Sdn. Bhd., said that the lower opening of crude palm oil futures was due to the weakening prices of soybean oil and concern about a weaker demand for the next few weeks.
Dalian's palm oil contract dropped 1.3%, while the most active soyoil contract in Dalian fell by 1.52%. Chicago Board of Trade soyoil prices fell 0.71%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
The oil prices rose on Friday as the Ukraine conflict intensified. Russian President Vladimir Putin warned of a possible global conflict.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency, the U.S. Dollar, fell by 0.11%, lowering the price of the commodity for foreign buyers.
GAPKI, the industry's main association, reported that Indonesian palm oil stocks increased in September, as both exports and consumption fell, but output improved slightly. Reporting by Ashley Tang, Editing by Sumana Nandy, and Anil D’Silva.
(source: Reuters)
