Palm oil rises, on track for second straight weekly gain
- The futures have gained 0.33% so far this week and are on track for their second consecutive weekly advance
JAKARTA: Malaysian palm oil futures extended gains on Thursday, tracking strength in crude oil prices and news of a possible supply crunch from Indonesia, the world’s largest producer of palm oil.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 34 ringgit, or 0.74%, to 4,612 ringgit ($1,162) a metric ton by the midday break.
The futures have gained 0.33% so far this week and are on track for their second consecutive weekly advance.
“The futures will be firm on the back of improved fundamentals from Indonesia supply news which is reflective to Malaysia side too, and renewed strength on crude oils,” said a Kuala Lumpur-based trader.
The market will be closed for a public holiday on Friday, May 1.
Indonesia’s crude palm oil output this year may drop by up to 2 million metric tons compared to 2025 due to El Nino-related dry weather and high fertiliser prices driven by the war in the Middle East, the head of the country’s palm oil producer association said on Wednesday.
Oil prices rose on Thursday on a report the US is considering potential military action against Iran to break the deadlock in negotiations to end the war, increasing concerns of more supply disruptions to already curtailed Middle East exports.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Indonesia has set its crude palm oil reference price at $1,049.58 per metric ton for May, up from April’s $989.63, a regulation from the Trade Ministry showed on Thursday.
Dalian’s most-active soyoil contract rose 0.73%, while its palm oil contract gained 1.48%.
Soyoil prices on the Chicago Board of Trade were up 0.65%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.48% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Palm oil may test a resistance at 4,639 ringgit per metric ton, a break above which could open the way toward 4,693-4,760 ringgit range, according to Reuters’ technical analyst Wang Tao.
Comments