Malaysian palm oil futures on Friday fell and posted weekly losses, as crude oil prices continued to decline while the local currency firmed, eroding export competitiveness.
The Bursa Malaysia Derivatives' August crude palm oil contract slipped 0.45% to 4,458 Malaysian ringgit ($1,097.17) per metric ton, and lost 1.78% over the week.
The September contract dropped 0.58% to 4,480 ringgit/mt, and recorded a 1.93% weekly decline.
Malaysian ringgit posted a 0.41% weekly gain against the US dollar, continuing last week's strength and dampening attractiveness of exports due to resulting higher costs for foreign buyers.
Nonetheless, cargo surveyors reportedly estimated that Malaysian shipments in June still grew month over month between 10.6% and 11.1%. Monthly industry data will be available on July 10.
This is despite the reported reduction in India's palm oil imports in June. Dealers cited by Reuters said imports dropped to their lowest in 14 months due to lackluster demand and decreasing economics of palm oil versus other rival oils.
Palm oil prices were also under pressure amid prospects of higher production in the coming weeks, according to IcebergX trader David Ng, as cited by Bloomberg.
As prices dropped, Ng reportedly noted that the market did not react significantly to Indonesia's expanded biofuel policy that began on July 1.
Still, analysts expect prices to remain supported in H2 driven by the accelerated biodiesel mandate and a potential tightening in supplies due to the anticipated strong El Nino weather phenomenon.
US markets are off on Friday for Independence Day.