KUALA LUMPUR: Malaysian palm oil futures logged a fourth consecutive weekly gain on Friday, after losses earlier in the week, as a softer ringgit supported the market, but uncertainty over the Middle East war and outlook for crude oil capped gains.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange climbed 47 ringgit, or 1.03percent, to 4,630 ringgit (USD1,154.04) a metric ton at close. The contract advanced 0.41percent this week.
The market is pricing in the uncertainty surrounding the war and the next direction of crude oil, while the weakening ringgit is providing additional support, said Paramalingam Supram-aniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most-active soyoil contract rose 1percent, while the palm oil contract advanced 2.13percent. Soyoil prices on the Chicago Board of Trade were up 0.43percent. Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices were on track for a weekly decline after US President Donald Trump extended a pause on attacks against Iran’s energy plants for 10 days, though investors remained on edge as an imminent resolution to the conflict looked unlikely.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, weakened 0.5percent against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Malaysia, a top exporter of palm oil, is putting in place measures to shore up fertiliser supply after the Middle East conflict and China’s export restrictions drove up raw material costs and caused a domestic supply crunch, its government said.
Comments