JAKARTA: Malaysian palm oil futures were set on Friday for a third straight weekly gain, as prices rose further on the back of strength in rival Dalian vegetable oils.
Palm oil ends up supported by rival oils at Dalian
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 77 ringgit or 1.55%, to 5,029 ringgit ($1,147.91) a metric ton in early trade, rising for a third straight session. The contract has gained 2.92% so far in the week.
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Dalian’s most-active soyoil contract rose 1.5%, while its palm oil contract gained 1.67%. Soyoil prices on the Chicago Board of Trade were down 0.62%.
Palm oil tracks price movements of rival edible oils as it competes for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 0.36% against the US dollar, making the vegetable oil more expensive for buyers holding foreign currencies.
Indonesia’s government is proposing to increase the mandatory blend of palm oil-based fuel in biodiesel to 50% in 2028, Edi Wibowo, director of bioenergy at the Energy and Mineral Resources Ministry, told an industry conference on Thursday.
India’s vegetable oil imports are estimated to decline further in the 2024-25 season to 15 million metric tons, as favourable weather will likely boost domestic production, an industry group said.
Malaysia’s palm oil inventories are forecast to fall in October, marking their first decline in three months, on lower output and higher exports, a Reuters survey showed.
Oil prices fell slightly as the risk that a hurricane in the Gulf of Mexico will affect US oil and gas output declined while the market continues to weigh how President-elect Donald Trump’s policies might affect supplies.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Palm oil may retest resistance at 5,023 ringgit, a break above which could open the way towards 5,076 ringgit to 5,112 ringgit, according to Reuters technical analyst Wang Tao.
Source: Brecorder
