Palm oil prices rise on the back of bargain-buying and stronger competition in edible oils

Malaysian palm oils futures were up on Friday, and on course to record a weekly gain. This was boosted by bargain-buying and the strength of rival edible oils. The gains were however capped by weaker estimates of exports.

At midday, the benchmark March palm oil contract on Bursa Derivatives Exchange rose 44 ringgit or 0.97% to 4,587 Ringgit per metric ton.

The contract has gained about 2.46% this week, and was expected to end a two-week slide.

Anilkumar Bagani said that the price of crude palm oil futures was higher in Asian hours, due to bargain-buying, a weaker Malaysian Ringgit, and gains in Chinese Vegetable Oil Futures.

Dalian's palm oil contract gained 1.1%, while the most active soyoil contract rose 1.31%. The Chicago Board of Trade's (CBOT) soyoil price rose by 0.43%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.

The palm ringgit's currency has weakened by 0.18% compared to the U.S. Dollar, making it cheaper for foreign buyers.

Bagani said that the lower Malaysian palm oil performance and lack of new demand at the end the year was seen as capping the gains.

Malaysian palm oil exports fell between Nov. 1-25 and Dec. 1-25, according to cargo surveyors.

The oil prices rose slightly, but only on a weekly basis amid hopes that China's economic stimulus will lead to a recovery.

CBOT soybeans futures rose more than 1% and soymeal reached a two-month peak on Thursday, traders reported. Worries about the dry weather in Argentina led speculators exit their short positions. (Reporting and editing by Ashley Tang)

(source: Reuters)