Palm gains for the fifth time in a row, logging a weekly gain
Malaysian palm futures rose on Friday for the fifth consecutive session, and recorded a weekly gain amid concerns about supply as heavy rains in Malaysia exacerbated already low production levels.
The benchmark palm-oil contract for February delivery at Bursa Malaysia's Derivatives exchange gained 138 Ringgit or 2.82% to $5,023 ringgit (1,131.31 USD) per metric ton.
After falling for two weeks in a row, the contract recovered to record a weekly gain 8.21%. This is the highest since the month of June 2023.
Paramalingam Supramaniam is the director of Selangor brokerage firm Pelindung Bestari. He said that the incessant rainfall, particularly in the east coast, and the northern parts, will exacerbate the already low production levels.
Many other states are also on alert for the possibility of further flooding. "The overall sentiment remains fragile, and supply constraints are likely to keep prices on the defensive," he added.
According to the Malaysian Palm Oil Board's (MPOB) data released earlier this month, palm oil stocks dropped by 6.32% to 1,88 million tonnes in October, while crude production of palm oil fell by 1.35% to 1,80 million tons.
Dalian's soyoil contract, which is the most active contract, rose by 1.49% while palm oil contracts gained 3.05%. Chicago Board of Trade closed on Thanksgiving Day.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks price changes of competing edible oils.
On Saturday, cargo surveyors will release their estimates of Malaysian palm oil imports for the period Nov. 1-30.
The oil price fell and is now on track for a drop of over 3% in a week, as fears about supply disruptions from the Israel-Hezbollah war eased.
Brent crude futures, for January, fell by 0.68% at 1013 GMT to $72.78 per barrel.
The palm ringgit's trade currency strengthened by 0.09% against dollar, increasing the price of the commodity for foreign currency holders. ($1 = 4.4400 ringgit)
(source: Reuters)
