KUALA LUMPUR: Malaysian palm oil futures reversed earlier gains to close 1 percent down on Friday, falling on bearish production outlooks to chart the biggest weekly drop since early November.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was finished 1.1 percent down at 2,010 ringgit ($485.39) a tonne for its sixth decline in as many sessions.
Palm had earlier lost as much as 1.3 percent to 2,006 ringgit, its weakest since Dec. 11.
For the week, palm lost 5.1 percent for a second straight weekly decline.
"Market sentiment is still weak overall," one Kuala Lumpur-based trader said, adding that the industry outlook for production was still bearish.
Palm oil production in Malaysia, the second-largest producer behind Indonesia, rose to 1.67 million tonnes in March, up 8.3 percent from February, the latest government data shows.
Palm prices had fallen 3 percent on Thursday on weakness in soyoil prices on the Chicago Board of Trade and soft demand sentiment.
Chicago soybean futures were on track for a fourth straight weekly loss on Friday as expected higher U.S. production and slowing demand in top buyer China dragged prices lower.
Malaysia this week said it would defer export duties on crude palm oil for the rest of the year in an effort to boost exports and expand in new markets.
Traders, however, say this may have little effect, given that duty has been at zero percent since September.
In related edible oils, the Chicago May soybean oil contract declined 0.5 percent on Thursday and was flat at 1105 GMT.
Chinese markets are closed for a national holiday and will reopen on Monday. - Reuters
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