Palm production drops, resulting in a fourth-week gain.
Malaysian palm futures increased on Friday as lower inventories supported the market, despite concerns about demand and uncertainty surrounding Indonesia's mandate for biodiesel.
At midday, the benchmark April palm oil contract on Bursa Derivatives Exchange rose 35 ringgit or 0.77% to 4,589 Ringgit ($1,033.56) per metric ton. This week, it has increased by 1.62%.
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 0.27%. Chicago Board of Trade soyoil prices were up 0.5%.
As palm oil competes to gain a share in the global vegetable oils industry, 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 rose amid rising fuel demand, and the expectation that Trump's plans to impose reciprocal tariffs on global goods would not take effect until April. This gave more time for avoiding a trade conflict.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency strengthened by 0.29% against dollars, increasing the price of the commodity 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.
Technical analyst Wang Tao stated that palm oil could retest its support level of 4,540 ringgit a ton. A break below this price would open the door to a range between 4,437 and 4,488 ringgit.
(source: Reuters)
