Palm oil's weekly loss is due to a decline in exports, and competition from rival oils.

Malaysian palm futures reversed gains early on Friday, logging a fourth successive weekly loss as weak exports and softer oil contracts from rivals outweighed the supply pressures of top producer Indonesia.

The benchmark palm-oil contract for delivery in November on the Bursa Derivatives Market closed 16 ringgit lower, or 0.43% at $3,680 Ringgit ($831.07) per metric ton.

It fell 1.79% in the last week.

Anilkumar bagani, the research head at Mumbai-based Sunvin Group, said that palm oil futures gained strength on expectations of Indonesian palm oil export levies and duties increasing in September. However, they retreated because of weaker August palm exports and Chicago soyoil's persistent decline.

Data from AmSpec Agri Malaysia, an independent inspection company, showed that exports of palm oil products from Malaysia for the period August 1-15 were down 22.3% compared to the previous month.

Intertek Testing Services, a cargo surveyor, said that exports fell by 20.2% in the same time period.

According to the data of the two companies, the pace of exports slowed down during the period, compared with a decline of 12.2%-17.7% from Aug. 1-10.

Chicago Board of Trade soyoil prices fell 1.27% for the fifth day in a row. Dalian's soyoil contract, which is the most active contract in Dalian, lost 0.22% while palm oil contracts increased 0.21%.

As they compete to gain a share of the global vegetable oil market, palm oil is affected as well by changes in prices in other oils.

Lingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that palm prices have become a little more expensive than soybean oil. This has led to concerns about demand.

He said that prices would move in a range, and be resilient because Indonesia's production for August is not as high as many had expected.

After a sharp rally from mid-July to last week, the Malaysian ringgit (the currency used for palm oil trade) has slipped by 0.1%. Palm oil becomes less appealing to foreign currency holders when the ringgit strengthens. $1 = 4.4280 Ringgit (Reporting and editing by Gabrielle Ng, Janane Vekatraman, Sonia Cheema and Vijay Kishore).

(source: Reuters)