KUALA LUMPUR: Malaysian palm oil futures edged lower on Friday and were poised for a second straight weekly decline, weighed down by weaker crude oil prices and Chicago soyoil.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange shed RM21 or 0.47 per cent, to RM4,474 (US$1,131.80) a metric tonne by the midday break.

The contract has declined 0.51 per cent so far this week.

The market traded lower on weaker crude oil and soybean oil prices during Asian hours, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.

Dalian’s most-active soyoil contract rose 0.39 per cent, while its palm oil contract added 1.12 per cent. Soyoil prices on the Chicago Board of Trade were down 0.2 per cent.

Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Oil prices fell on optimism that the Middle East conflict could be nearing an end after a 10-day ceasefire between Lebanon and Israel took effect and President Donald Trump said the US and Iran may meet for talks on the weekend.

Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, weakened 0.03 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.

Malaysia’s palm oil–based biodiesel consumption is set to rise by more than 300,000 tonnes annually, the Malaysian Palm Oil Board said, as the country joins top producer Indonesia in raising blending mandates to reduce reliance on energy imports.

Palm oil may break a resistance at RM4,517 per tonne and rise into a range of RM4,566-RM4,584, Reuters technical analyst Wang Tao said.

Source : NST