KUALA LUMPUR: Malaysian palm oil futures climbed on Friday and logged a weekly gain, as worries over El Niño’s potential impact on production supported prices.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 27 ringgit, or 0.55percent, to 4,931 ringgit (USD1,220.24) a metric ton at the close. The contract gained 0.76percent this week, recovering from the previous week’s losses.
At the closing, crude palm oil futures ended higher on ongoing concerns over output in the medium term amid El Niño weather conditions affecting both Malaysia and Indonesia, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian’s most-active soyoil contract declined 0.19percent, while its palm oil contract shed 0.39percent. Soyoil prices on the Chicago Board of Trade were down 0.46percent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil prices eased but were still headed for a weekly gain as rising US-Iran tensions heightened concerns over Middle East supply risks.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Meanwhile, Indonesia’s effort to exert control over global prices for its vast natural resources by setting up a new commodities exchange will struggle to compete with established bourses and risks backfiring if participation is mandatory.
Indonesian state-owned plantation company Agrinas Palma Nusantara is also targeting palm oil output
of 1.5 million tons next year, said Chief Executive Mohammad Abdul Ghani.
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