Crude palm oil futures on Malaysia's derivatives exchange edged lower Friday, as ample supplies and tepid demand kept a lid on prices.
The benchmark May contract at Bursa Malaysia Derivatives ended 1.3% lower at 2,367 ringgit ($765) a metric ton, the lowest since Jan. 14.
Palm oil is also down 1.3% this week, as weak export demand fueled concern of stockpiles staying near record levels in February in Malaysia, the world's second-largest palm oil producer.
Inventories totaled 2.58 million metric tons at the end of January, from December's all-time high of 2.63 million tons, showed data from industry regulator the Malaysian Palm Oil Board.
MPOB will issue February crop data on March 11.
"Until signs of better demand emerge, we expect palm oil stockpiles to stay above 2 million tons over the next few months," said an analyst at a local bank.
Cargo surveyors Intertek Agri Services and SGS (Malaysia) Bhd. said shipments fell in February by 9.1% and 8.8%, respectively, from the month prior.
Planters and traders will meet in Kuala Lumpur next week to discuss the supply-demand outlook, and to hear price forecasts from oilseed analysts Godrej International trading head Dorab Mistry and LMC International Chairman James Fry.
Palm oil will trade sideways next week, moving in a range of MYR2,300/ton to MYR2,420/ton, as traders stay away ahead of the annual palm oil conference starting Tuesday, said a trading executive at foreign brokerage.
In the cash market, refined palm olein for March was offered at $810/ton, while cash CPO for prompt shipment was offered at MYR2,360/ton.
Open interest on the BMD was 160,500 lots, versus 163,550 lots Thursday. One lot is equivalent to 25 tons.
A total of 35,258 lots of CPO were traded versus 54,738 lots Thursday.
Ending BMD CPO futures prices in MYR/ton: Month Close Previous Change High Low Mar 2,350 2,375 -25 2,372 2,340 Apr 2,360 2,387 -27 2,393 2,362 May 2,367 2,397 -30 2,405 2,369 Jun 2,377 2,405 -28 2,412 2,380