Palm oil drops as the weather improves in Malaysia. Set for second week gains
The price of Malaysian palm futures fell on Friday as supply concerns eased. Weather conditions in Malaysia, the second largest producer of palm oil, also improved. However, the contract was still set to increase for a second consecutive week.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for February delivery had fallen 20 ringgit or 0.39% to 5,115 Ringgit ($1,157.24).
This week, the contract has increased by 1.89%.
Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari.
The country's Meteorological Department forecasted monsoon surge between Dec. 8 and 14, which would bring continuous rain along the east coast of Malaysian peninsula and in parts of Sabah, Sarawak and Borneo Island.
He added that the contract was also becoming less demanding, as there is little demand for January, and market participants were waiting to see what data from Malaysian Palm Oil Board on November's performance would reveal.
Dalian's palm oil contract, which is the most active contract, fell by 0.8%. Chicago Board of Trade Soyoil fell 0.09%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
A survey shows that Malaysian palm oil inventories will have declined in November for the second month running as torrential rainfall disrupted production.
The technical analyst Wang Tao predicted that palm oil would continue to rise, reaching a range of 5,202-5,242 Ringgit per ton, due to a wave 5. ($1 = 4.4200 ringgit)
(source: Reuters)
