KUALA LUMPUR: Malaysian palm oil futures fell to their lowest in a month on Friday and were set for their worst weekly decline since 2012, as India's import restrictions on Malaysian palm oil dragged prices.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange was down RM6, or 0.2%, to RM2,881 by 2:58 GMT, it's lowest in a month.
Palm oil prices have fallen 7.8% this week, its biggest weekly fall since Sept 2012.
* India, the world's largest edible oil buyer, last week restricted imports of refined palm oil and informally instructed traders to avoid purchases from Malaysia following a row over criticisms by Malaysia's prime minister over India's new citizenship law and actions in Kashmir.
* India's move is expected to create a huge challenge for Malaysia, as India has been its top market for the past five years.
* However, higher biodiesel demand in top suppliers Malaysia and Indonesia and supply tightness buoyed prices. Lower production is expected for the first half of the year as dry weather and lower fertiliser usage in early 2019 curbed yields.
* Benchmark palm oil prices will not rise above 3,300 ringgit per tonne in the first half of 2020 and its recent rally has eliminated competitive edge over rival edible oils, industry analyst James Fry said.
* Dalian's most-active soyoil contract fell 0.4%, while its palm oil contract also slid 0.1%. Soyoil prices on the Chicago Board of Trade gained 0.2%.
* Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
* Palm oil may fall to 2,818 ringgit per tonne, as it has broken a support at 2,911 ringgit, Reuters technical analyst Wang Tao said. - Reuters