KUALA LUMPUR: Malaysian palm oil futures closed more than 2percent higher on Friday, and logged a second weekly gain, supported by strength in soybean oil following US plans to finalise biofuel quotas.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 81 ringgit, or 2.0 percent, to 4,071 ringgit (USD1,003.95) a metric ton at the close. The contract gained 0.87percent this week.
The market traded higher on soybean oil gains amid news that the Trump administration would release 2026 biofuel quotas by March this year, which could generate more demand for soybean oil biofuel, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
The US plans to keep biofuel quotas close to its initial proposal that would see an increase in total biofuel blending volumes from 2025 levels, while dropping a plan to penalise imports of renewable fuels and feedstocks, according to two sources familiar with the plans.
Dalian’s most-active soyoil contract added 0.63percent, while its palm oil contract firmed 0.58 percent. Soyoil prices on the Chicago Board of Trade rose 0.49percent. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Also helping prices were cargo surveyors’ estimates regarding Malaysian palm oil products exports for January 1-15, which rose between 17.5percent and 18.6percent month-on-month. Meanwhile, the ringgit, palm’s currency of trade, weakened 0.07percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Oil prices rose slightly as market participants weighed concerns about supply risks, though the chances of a US strike on Iran have receded. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Comments
Comments are closed for this article.