Malaysian palm oil price edges lower, down nearly 3% on the week

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was down 1.1 percent at 2,165 ringgit a tonne at the end of the trading day, its sharpest daily decline in a week. Trading volumes stood at 38,540 lots of 25 tonnes each at the close of trade.

KUALA LUMPUR: Malaysian palm oil futures edged down at the close of trade on Friday, recording a fifth session of losses in six and tracking weakness in China's Dalian Commodity Exchange, traders said.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was down 0.7 percent at 2,106 ringgit ($516.18) a tonne on Friday evening. It earlier fell up to 1.2 percent to 2,095 ringgit, a low since March 19.

The market was also down 2.8 percent on a weekly basis, and down 0.7 percent in March for a second consecutive month of declines. Prices of the edible oil have been weighed by expectations of rising production in March and current highs in inventory levels in Malaysia.

On a quarterly basis, palm is also down 0.7 percent. Malaysian palm oil inventories rose 1.3 percent to 3.05 million tonnes in February from a month earlier while production declined 11.1 percent to 1.54 million tonnes.

"Palm is down mirroring overnight weakness in rival oilseed," said a Kuala Lumpur futures trader, referring to soyoil's losses on the U.S. Chicago Board of Trade on Thursday.

Another trader added that palm prices were also weighed down by losses in soyoil and palm olein on China's Dalian Commodity Exchange.

The Chicago May soybean oil contract fell 0.7 percent on Thursday, and was trading flat at around 1052 GMT.

In other related oils, the May soyoil contract on the Dalian Commodity Exchange declined 1.2 percent while the Dalian May palm oil contract fell 1.8 percent.

Palm oil prices are affected by movements in soyoil, as they compete for a share in the global vegetable oil market. - Reuters