Palm slips over 1% after no duty waiver but still log weekly gain

Malaysian palm oil futures dropped over 1% on Friday, despite the government's failure to announce an anticipated export duty waiver in its Budget. The October delivery contract on the Bursa Malaysia Derivatives Exchange fell 69 ringgit, or 1.48%, to 4,592 ringgit ($1,124.66) per metric ton at the close. The contract had gained 1.26% this week.

The market had anticipated Malaysia might waive export duties, making its exports more competitive against Indonesia, but the government only announced support for smallholder replanting assistance during the budget announcement. Proprietary trader David Ng noted that traders are now cautious, awaiting the Malaysian Palm Oil Board's supply-demand report and September inventories.

Malaysia's palm oil stocks are projected to reach an all-time high in September, surpassing the December 2018 peak due to record production outpacing sluggish export demand. Dalian's soyoil contract rose 0.91%, and its palm oil contract added 0.83%. Soyoil prices on the Chicago Board of Trade were up 0.49%. Palm oil mirrors the price movements of other edible oils as it competes for global vegetable oil market share.

Oil prices declined as Middle East supply worries eased after US President Donald Trump stated the country would not strike Iran before the upcoming US elections, amid productive discussions to end their conflict that has disrupted global energy markets. Weaker crude oil futures make palm less appealing for biodiesel feedstock. The ringgit, palm's trade currency, strengthened 0.12% against the dollar, making it slightly pricier for foreign currency holders.