KUALA LUMPUR: Malaysian palm oil futures notched up their biggest rise in two weeks in on Friday on expectations of falling inventories, after a sharp decline on Thursday evening and being largely range-bound this week.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.34 percent at 2,343 ringgit ($594.82) a tonne, its biggest gain since April 20. It earlier fell to a low of 2,324 ringgit, its weakest level since August 2016.
The market, however, fell 1.8 percent for the week, marking a second consecutive weekly decline.
Trading volume stood at 34,555 lots of 25 tonnes each at the market close.
"The market is up on expectations that end-stocks will drop," said a futures trader in Singapore. "Consumption could also be supported due to Ramadan," he said, referring to the Muslim fasting month which begins in mid-May this year.
Ramadan typically leads to higher usage of palm oil for cooking in Muslim majority regions, which sees devotees break day-long fasts with communal feasting.
Malaysian palm oil inventories at the end of April are expected to have fallen 4.1 percent to 2.23 million tonnes, their lowest in six months, according to a Reuters poll of nine traders, planters and analysts.
Meanwhile, the survey respondents also forecast that April exports would fall 5.5 percent month-on-month to 1.48 million tonnes, but output would remain flat at 1.57 million tonnes.
Official data for April is scheduled for release by industry regulator the Malaysian Palm Oil Board on May 10 at around 0430 GMT.
Another trader added overnight gains in US soyoil on the Chicago Board of Trade provided additional support to palm.
The Chicago July soybean oil contract rose as much as 0.7 percent on Thursday, but was last down 0.5 percent on Friday.
In other related oils, September soybean oil on China's Dalian Commodity Exchange fell 0.1 percent, while the Dalian September palm oil contract declined 1 percent.
Palm oil is impacted by movements in rival edible oils as they compete for a share in the global vegetable oils market.
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