KUALA LUMPUR: Malaysian palm oil futures were little changed after trading in a tight range on Tuesday, as weaker soyoil prices and muted export demand pressured the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange lost RM2, or 0.05 per cent, to RM4,336 (US$962.49) a metric ton by the midday break. The contract lost 0.69 per cent in the previous session.
Crude palm oil traded lower in the morning session, weighed down by weaker soybean oil prices during Asian hours as well as sluggish export pace, which is pressuring prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Exports of Malaysian palm oil products for December fell between 2.5 per cent and 7.8 per cent, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Dalian's most-active soyoil contract fell 0.69 per cent, and its palm oil contract shed 0.44 per cent. Soyoil prices on the Chicago Board of Trade were down 0.62 per cent.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices extended losses to a second straight session on a technical correction after last week's rally, while forecasts for ample supply and a firm dollar also weighed.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, firmed nearly 0.1 per cent against the dollar, making the commodity slightly more expensive for buyers holding foreign currencies.
Malaysia's palm oil inventories are forecast to fall in December, a third consecutive month of drop, amid declining production due to recent heavy rainfall that affected the harvest, a Reuters survey showed.
Palm oil may fall into the RM4,161 to RM4,202 per metric tonne, as it has completed a weak bounce, Reuters technical analyst Wang Tao said.