Palm surges on data from cargo surveyors and rival oils, logging a 4th weekly gain

Malaysian palm futures gained more than 2% Friday, logging a fourth consecutive weekly gain. This was due to stronger rival edible oils as well as positive data from cargo surveyors.

The benchmark palm-oil contract for December delivery at Bursa Malaysia's Derivatives exchange rose by 117 ringgit or 2.76% to 4,350 Ringgit ($1,015.41) per metric ton.

This week, the contract increased by 1.16%.

Darren Lim is a commodities analyst with Singapore-based Philip Nova. He said that the market's performance was influenced by several factors including the robust export data from cargo surveyors covering the period Oct. 1-10, the stronger Dalian Commodity Exchange's vegetable oils, and the gains in Chicago soyoil overnight.

He said: "From a technological perspective, we also observe a pattern that is typical indicative of a bullish tendency."

Dalian's palm oil contract, which is the most active contract in Dalian, grew by 1.63% while soyoil rose 0.78%. Chicago Board of Trade soyoil prices were up by 0.55%.

As rival edible oils compete to gain a share in the global vegetable oil market, palm oil monitors the price movement of their competitors.

Exports of palm oil-based products from Malaysia between Oct. 1-10 were estimated to have increased by 13.6% to 18.9% compared with a month ago.

The palm ringgit's trade currency strengthened by 0.09% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.

Oil prices weakened on Friday, but investors were still on track for a second consecutive weekly gain. They weighed up the impact of Hurricane Sandy on U.S. oil demand with any disruption to supply if Israel attacked Iranian oil sites.

Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

(source: Reuters)