SINGAPORE: Malaysian palm oil futures inched lower on Friday, extending losses into an eighth straight session as weak exports continued to weigh and as investors turned cautious ahead of a key industry conference next week.
Traders were concerned Malaysia’s palm exports, which one cargo surveyor said fell 9.1 per cent in February, would decline further as a zero-per cent export tax for the crude grade rises to 4.5 per cent this month.
Focus is also shifting to Bursa Malaysia’s annual palm oil conference next week, where leading industry analysts including Dorab Mistry and James Fry will present their price outlooks.
"The market is waiting for Dorab Mistry’s forecast next week, which is likely to be bearish," said Alan Lim Seong Chun, a research analyst at Malaysia’s Kenanga Investment Bank.
"February exports were weaker than the expected 3 per cent decline. Besides that, soybean oil overnight also declined about 1 per cent so that also pressured the palm oil market."
By the mid-day break, the benchmark May contract on the Bursa Malaysia Derivatives Exchange had lost 0.9 per cent to RM2,375 per tonne. Prices fell to a low of RM2,368 on Thursday, a level last seen on January 18.
Total traded volume stood at 13,893 lots of 25 tonnes each, just slightly higher than the usual 12,500 lots.
For the week, the edible oil is on track to post a 6.3 per cent loss, the worst since mid-November, tracking losses in the soybean oil market as improving South American weather boosts the supply outlook for soybeans.
Industry players are also keeping an eye on slowing palm oil output in Malaysia, the world’s No.2 producer.
Less production could help ease inventory levels, which stood at 2.58 million tonnes in January, although slowing exports could mean they will not ease by much.-- Reuters