KUALA LUMPUR: Malaysian palm oil futures logged a second consecutive weekly gain on Friday despite falling nearly 1percent in the session, as higher-than-expected stockpiles weighed on prices, though Indonesia’s biodiesel plans supported prices.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange shed 45 ringgit, or 0.98percent, to 4,546 ringgit (USD1,076.74) a metric ton at the close. The contract rose 2.34 percent this week.
The Malaysian Palm Oil Board (MPOB) report is bearish, given that stocks is higher than what the market had expected, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Malaysia’s palm oil stocks unexpectedly rose for the seventh consecutive month in September to hit their highest in nearly two years, as higher imports amid weak local demand outweighed a slight output decline, industry regulator data showed.
However, Indonesia’s B50 biodiesel plans was supporting prices, Ng added. On Thursday, Indonesia said it will implement its B50 biodiesel programme in the second half of 2026.
The plan could eliminate the country’s need to import any diesel next year. Indonesia said it will need 5.3 million tons of additional crude palm oil to implement its mandatory B50 biodiesel plan in 2026.
Dalian’s most-active soyoil contract rose 0.1 percent, while its palm oil contract slid 0.78 percent. Soyoil prices on the Chicago Board of Trade fell 0.77 percent.
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices declined, after settling around 1.6 percent lower in the previous session, as the market’s risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.19percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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