Palm oil tracks rival edible oils and crude lower; heads for weekly gain

Malaysian palm oil futures declined on Friday after weaker rival vegetable oils in Dalian and Chicago pulled prices down along with crude, although the contract remained set for a weekly increase, Business Recorder reported. By midday, the December contract on Bursa Malaysia Derivatives Exchange was 30 ringgit lower, a 0.61% decline, at 4,906 ringgit ($1,203.93) per metric tonne. So far this week, the contract has added 1.91%.

Dalian's most-active soyoil contract dropped 1.56%, and its palm contract fell 1.64%, while soyoil on the Chicago Board of Trade slipped 0.74%. A Kuala Lumpur-based trader said the market is watching an official Indian announcement on a possible reduction in import tariffs, which could matter for Malaysian palm demand. Oil prices extended their decline for a third day, and weaker crude makes palm less attractive as a feedstock for biodiesel.

Dry weather and widespread fires could cut output in Kalimantan, Indonesia's key producing area, by 12% to 15% during the fourth quarter, an analyst said Wednesday. The ringgit firmed by 0.51% versus the US dollar, raising the cost of palm for purchasers that hold other currencies.