Palm oil falls on weak demand; set for sixth weekly gain
KUALA LUMPUR: Malaysian palm oil futures fell on Friday due to weak demand in key markets, although the contract was set for a sixth consecutive weekly gain despite needing a catalyst to sustain momentum.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 10 ringgit, or 0.24%, to 4,094 ringgit ($962.61) a metric ton at the midday break.
The contract has gained 5.5% so far this week.
Trading volumes have been relatively thin and prices have largely factored in most internal and external variables, Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, said.
'Going forward, sustaining the current trend will require additional bullish news to emerge.
The demand side will be particularly crucial in July as the current market rally has been premised solely on external factors and has not yet demonstrated a robust increase in demand.'
Dalian's most-active soyoil contract rose 0.52%, while the palm oil contract shed 0.05%.
Soyoil prices on the Chicago Board of Trade were up 0.38%.
'Palm oil remains cornerstone of Pakistan's edible oils and fats sector'
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Cargo surveyors are expected to release Malaysian palm oil export estimates for June 1-20 later in the day.
Brent crude prices pared gains from the previous session, falling nearly $2 on Friday after the White House delayed a decision on US involvement in the Israel-Iran conflict, but they were still poised for a third straight week in the black.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, strengthened 0.09% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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