Palm prices rise on lower production and log a fourth weekly gain
Malaysian palm futures closed higher on Friday, logging a fourth consecutive weekly gain. Lower stocks supported the market in spite of demand concerns and uncertainty surrounding Indonesia's mandate for biodiesel.
At the close, the benchmark April palm oil contract on Bursa Derivatives Exchange rose 41 ringgit (0.9%), to 4,595 Ringgit ($1,036.78) per metric ton. The contract increased by 2.02% in the past week.
Paramalingam Supramaniam of Selangor-based brokerage Pelindung Bestari said that the market was slightly adjusted due to concerns about demand, but lower end stocks supported prices.
The uncertainty surrounding Indonesia's biodiesel policy is also keeping traders cautious.
Eniya Listeiani Dewi, an official with the energy ministry, said that Indonesia expects to complete its B40 Biodiesel Programme next month, after initial delays.
Dalian's palm oil contract, which is the most active contract in Dalian, rose by 0.38%. Chicago Board of Trade soyoil prices were up by 0.93%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
On Saturday, cargo surveyors will release their estimates of Malaysian palm oil imports from February 1-15.
The oil prices were rising and poised to end a three-week decline. This was boosted by the increasing fuel demand, and expectations that U.S. reciprocal tariffs on global goods would not be implemented until April. This gave more time to avoid trade war.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency strengthened by 0.47% to the dollar. This made the commodity more costly for buyers who hold foreign currencies.
The Buenos Aires Grain Exchange reported on Thursday that more than 60% of Argentina’s soy crop was in excellent to good condition following recent rains, after the fields had been battered and dried by the hot, dry climate. ($1 = 4.4320 ringgit)
(source: Reuters)
