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Palm oil charts third weekly loss on demand woes

TheEdge Fri, Mar 15, 2019 - 2 months ago

SINGAPORE/KUALA LUMPUR (March 15): Malaysian palm oil futures charted a third consecutive week of declines on Friday evening on concerns over demand from top buyers China and India, though prices reversed some losses to end the trading day slightly higher. 

Abundant supplies in key consumers of the tropical product are expected to weigh on the market, although the downside is limited, traders said.
The benchmark third-month palm oil contract on the Bursa Malaysia Derivatives Exchange was up 0.15% at 2,066  ringgit (US$505.26) a tonne by the end of the trading day. 

Earlier in the session, it dropped to its weakest since mid-December at 2,038 ringgit a tonne.

"There is some scope for prices to decline, but as soon as the third-month contract drops below 2,000 ringgit a tonne, buying will kick in," said one Singapore-based trader who supplies palm oil to India.

Palm oil is down 2.8% this week, and has shed 2.6% since the start of the month.

European nations were cutting down on palm oil consumption due to environmental concerns.

The European Commission says palm oil cultivation causes deforestation and its use in transport fuel should be phased out, putting it on a collision course with big palm oil producers like Malaysia and Indonesia.

The Commission published its criteria on Wednesday for determining what crops cause environmental harm, part of a new EU push to boost the share of renewable energy to 32% by 2030 and determine appropriate renewable sources.

In related oils, Chicago soybean oil was down 0.3% and the soyoil contract on the Dalian Commodity Exchange dropped 1.5%.

 Palm, soy and crude oil prices at 1055 GMT

 Contract           Month    Last  Change     Low    High  Volume
 MY PALM OIL       MAR9      1880  -70.00    1880    1950       2
 MY PALM OIL       APR9      2024   +3.00    1991    2045    2663
 MY PALM OIL       MAY9      2066   +3.00    2038    2088   18664
 CHINA PALM OLEIN  MAY9      4448  -50.00    4426    4480  498782
 CHINA SOYOIL      MAY9      5532  -86.00    5518    5604  362932
 CBOT SOY OIL      MAY9     29.48   -0.09   29.41    29.6   11190
 INDIA PALM OIL    MAR9    519.20   -2.60  516.20   521.2    1024
 INDIA SOYOIL      MAR9     764.5   -0.45  763.75   765.9    3280
 NYMEX CRUDE       APR9     58.56   -0.05   58.46   58.95   93170
 (US$1 = 4.0880 ringgit)

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