Malaysian palm oil futures fell on Friday evening for a third consecutive week of losses, tracking declining rival vegetable oils and amid investor concerns over Britain's vote to leave the European Union.
The market fell for two sessions this week before paring losses in late trade on Thursday, but declined on Friday to fall 2.9% this week.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange fell 0.2% to RM2,379 (US$582) per tonne in the evening, unchanged from during the midday break. Traded volumes stood at 65,216 lots of 25 tonnes each at the close of trade.
Palm has declined in nearly all of its sessions in the last three weeks as poor fundamentals weighed on prices.
Traders expect output to rise in line with the seasonal trend and for exports to weaken after Ramadan demand in the coming months. The Muslim holy festival entails day-long fasts broken by communal feasting, incurring higher palm oil demand for cooking the month before Ramadan.
"The vote counting in favour of a Brexit caused a lack of market confidence," said a trader from Malaysia. "Soyoil trading is also down."
Global markets are seeing a shake-up on Friday as Britain voted to leave the European Union in a landmark referendum, pulling down stock markets and currencies across the region.
In competing vegetable oils, the Chicago Board of Trade soyoil contract for July fell 1.9%, while the September soybean oil contract on the Dalian Commodity Exchange declined 1.6%.
Malaysian palm oil futures steadied in late trade on Thursday, recovering earlier losses as some traders bought palm before a possible spike in the ringgit, if Britain votes to stay in the European Union.
The ringgit and other emerging market currencies have been hit by recent volatility in global financial markets on nervousness about the economic impact if Britain votes to leave the EU in a referendum on Thursday.
Final opinion polls were mostly too close to call, however, some gave a vote to stay in the bloc a slight edge.
"Traders usually square their positions, ahead of a major announcement," one trader said, adding that the market was expecting Britain to stay in the EU.
A rising ringgit, the currency of trade for palm oil, makes the vegetable oil more expensive for foreign currency holders.
Palm fell earlier in the day on expectations for rising production and lower exports this month.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange rose 0.4% to 2,384 ringgit (US$594) per tonne at the close of trade, after earlier hitting a six-month low of 2,351 ringgit.
Traded volumes stood at 68,271 lots of 25 tonnes each in late trade, higher than the 2015 daily average of 44,600 lots.
"The continuous fall has resulted in most technicals being terribly oversold," said a Kuala Lumpur-based trader.
"The uncertainty over global events post Britain's vote also played a pivotal role in the prices ending higher."
Palm declined for nine consecutive sessions before paring losses on Friday. It fell for another two sessions this week on poor fundamentals.
Palm industry participants forecast higher June output versus a month ago, as fresh fruit yields increase in line with the growing season. Production typically reaches its peak in the third to fourth quarter of the year.
Malaysian palm oil futures hit a more than five-month low on Tuesday, their 11th fall in 12 sessions, as a stronger ringgit and bearish fundamentals pulled down markets, and as traders forecast output would rise in the coming months.
The ringgit, the currency palm is traded in, gained 0.7% to 4.0320 against the dollar in late trade on Tuesday, making palm oil more expensive for foreign currency holders.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange dropped 1.1% to RM2,374 (US$588) per tonne at the close of trade on Tuesday.
It earlier hit RM2,370, the lowest since Jan. 13.
Palm saw its sharpest weekly decline in 8 months last week, and has lost 9.4% so far this month, on track for its worst month since Aug. 2014.
Traded volumes stood at 46,135 lots of 25 tonnes each in the evening.
"We're seeing a continued downward trend on a strong ringgit, poor exports and rising production," said a trader from Kuala Lumpur.
Exports decline after the festival period, and demand is seen cooling until the Hindu festival season of Diwali in October.
Output in Malaysia is forecast to climb towards the end of the year, contributing to higher inventory levels and weighing on prices.
Malaysian palm oil futures fell on Monday after the government said it was in talks with oil and automotive companies to delay the start of its B10 biodiesel mandate to July.
The ministry of plantation industries and commodities said in response to a Reuters' question that the mandate would start a month later than initially planned and would aim to complete full implementation of its new standard by August.
Malaysia's so-called B10 programme aims to raise the minimum bio-content of biodiesel to 10% for the transport sector, mopping up more palm oil for blending purposes and increasing domestic demand.
The world's second largest palm oil producer after Indonesia has also said it would raise the bio-fuel content for the industrial sector to 7%
Palm prices had fallen in early trade after the Sun newspaper reported that the B10 programme would be suspended until further notice, a trader said.
Benchmark palm oil futures for September delivery on the Bursa Malaysia Derivatives Exchange fell 2.1% to 2,400 ringgit (US$591) per tonne on Monday. It hit an intraday low of 2,397 ringgit, its weakest level in over five months.
Palm oil futures rose on Friday after nine consecutive days of losses.
Traded volumes stood at 47,297 lots of 25 tonnes each at the close of trade on Monday, versus the 2015 daily average of 44,600 lots.
A stronger ringgit also impacted futures prices.
A rising ringgit against the dollar makes palm more expensive for holders of foreign currencies, as the vegetable oil is traded in ringgit.
The ringgit rose 0.9% to hit 4.0620 per dollar around on Monday evening. It earlier hit 4.0640 per dollar, its strongest levels since June 10, as the weekend by-election wins by Malaysia's ruling party boosted ringgit sentiment.
Weak export data also did little to support markets.
Cargo surveyor data on Monday showed that exports of palm oil from June 1-20 fell 8%-10% from the same time period a month ago, as demand from mainly Muslim markets weakened leading up to the Eid festival.