Palm prices rise on strong demand and supply concerns; expected to gain weekly
The price of Malaysian palm oils futures rose for the third session in a row on Friday, reaching their highest level in almost three weeks. This was due to expectations that production would be weak in August and an improving demand.
The benchmark palm-oil contract for delivery in November on the Bursa Derivatives Exchange rose 43 ringgit or 1.12% to 3,869 Ringgit ($884.95) per metric ton.
The contract rose 5.1% in the past week, which is its largest weekly gain since June 2023.
The preliminary production figures for the period of Aug. 1-20 by the Malaysian Palm Oil Association were not encouraging. We are not seeing double-digit increases in production, said Paramalingam Supramaniam a director with Selangor broker Pelindung Bestari.
The price is also supported by Indonesia's plans to increase the biodiesel mix to 40% from 35% in January and the improved demand from China and India, the two largest buyers.
"We saw lots of interest yesterday from China; they purchased a large amount of cargo for December. Yesterday, there were a lot activities in India. They also bought a large amount of cargo. Overall, the demand for palm oil is returning," said he.
Dalian's palm-oil contract rose 0.96% while the most active soyoil contract fell 0.21%. Chicago Board of Trade soyoil prices rose by 1.09%.
As they compete to gain a share of the global vegetable oil market, palm oil is affected as well by changes in prices in other oils.
Data from cargo surveyors Societe Generale de Surveillance, Intertek Testing Services, and AmSpec Agri Malaysia revealed that exports of Malaysian products containing palm oil for the period August 1-20 were down between 16.7% to 18.4% compared with a month ago.
(source: Reuters)
