KUALA LUMPUR: Malaysian palm oil futures settled higher on Friday, supported by stronger crude oil prices, though the contract logged a third straight weekly fall.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange gained 24 ringgit, or 0.55percent, to 4,417 ringgit (USD1,119.08) a metric ton at the close.
The contract fell 1.95percent this week. Sluggish demand from key markets, softer rival oils, and continued uncertainty surrounding Indonesia’s biodiesel mandate weighed on the market this week.
For Friday’s rise, a Kuala Lumpur-based trader pointed to crude oil prices remaining supported above the USD100 level overnight, with bullish momentum extending into the Asian morning trading session. Oil prices gained more than 3percent after US President Donald Trump said his patience with Iran is running out, adding to concerns over the lack of progress on a peace deal to end ship attacks and seizures around the Strait of Hormuz.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. Dalian’s most-active soyoil contract fell 1.33percent, while its palm oil contract shed 0.63percent. Soyoil prices on the Chicago Board of Trade were up 0.41percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Cargo surveyors estimated that exports of Malaysian palm oil products for May 1-15 fell between 1.6percent and 16.5percent from a month earlier. The ringgit, palm’s currency of trade, weakened 0.43percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
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