KUALA LUMPUR: Malaysian palm oil futures closed lower on Friday, falling for a second week, weighed down by weakness in related edible oils and crude oil.

“Continuous weakness in competing vegetable oils and the energy front is likely to weigh in and pressure palm prices,” said a Kuala Lumpur based trader, referring to soyoil on the US Chicago Board of Trade and China’s Dalian Commodity Exchange. Palm oil prices are affected by movements in crude oil, as it is used as feedstock to make biodiesel.

Oil prices fell on Friday as Opec discussed a potential exemption from cutting output for Iran and as the producer club sought to get heavyweight supplier Russia on board. Palm oil prices were lower for most of the week on expectations that stockpiles would touch 3 million tonnes and as Indonesia relaxed rules on its palm oil export levies. The move to aid its oil palm farmers and boost exports makes Malaysian palm oil less price competitive.

In other related oils, the Chicago December soybean oil contract was down 0.1pc, while the January soybean oil contract on the Dalian Commodity Exchange declined 2.5pc.

Palm oil is affected by movements of other edible oils, as they compete for a share in the global vegetable oil market. A bearish target range of 1,956-1,972 ringgit per tonne remains unchanged for palm oil, said Wang Tao, a Reuters market analyst for commodities and energy technicals.

Published in Dawn, December 8th, 2018