Palm surges by more than 2% and logs a weekly gain
Malaysian palm futures closed Friday more than 2% above the previous week's closing price, as soyoil prices in Chicago rose.
The benchmark contract for palm oil delivery in March on the Bursa Derivatives Exchange, Bursa Malaysia, rose by 97 ringgit or 2.26% to $4,393 ringgit (US$977.74) per metric ton, at the close.
This week, the contract rose by 0.57%.
Anilkumar bagani, the head of research for Mumbai-based Sunvin Group's vegetable oil broker, said that crude palm oil futures traded higher today on the back a strong recovery overnight in Chicago soyoil.
Bagani said that the lackluster Dalian palm olein contracts and the uncertainty surrounding the B40 biodiesel mandate in Indonesia, as well as the expectation of a decline in the Indonesian palm oil benchmark price for February, capped the gains.
Dalian's palm oil contract, which is the most active contract, gained 0.21%. Chicago Board of Trade soyoil prices rose 3.23%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Malaysian palm oil stocks fell for the third consecutive month. They dropped 6.91% at the end December to 1,71 million metric tonnes, while production of crude palm oil decreased 8.3%, and exports plummeted 9.97%.
According to cargo surveyors, Malaysian palm oil exports dropped between 21.4% and 26.68% from January 1-10.
Oil prices are on course to rise for a third consecutive week as traders focus on possible supply disruptions due to sanctions. Meanwhile, icy conditions expected in parts of Europe and the United States will drive fuel demand.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm industry's main currency, the Malaysian ringgit (RM), strengthened by 0.16% in relation to the dollar. This made the product more expensive for foreign buyers. ($1 = 4.4930 ringgit)
(source: Reuters)
