KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday and posted their first weekly gain in three weeks, as forecasts of a price recovery in the coming months at a key industry conference boosted sentiment.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.5 percent, to 4,462 ringgit (USD1,093.09) a metric ton at the close. The contract rose 4.79 percent this week.
Leading industry analysts at the Indonesian Palm Oil Conference expect palm oil prices to recover in the coming months with the impact of El Niño-induced drought on production expected to materialise in the first quarter of 2027, mainly in top producer Indonesia.
However, sentiment was further restrained by uncertainty surrounding reports of a new service fee by Danantara Sumberdaya Indonesia, with market participants awaiting further details on its potential impact on the palm oil industry, a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract gained 0.21 percent, while its palm oil contract added 0.44 percent. Soyoil prices on the Chicago Board of Trade were up 0.79 percent.
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 0.22 percent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Oil prices edged up but were headed for a second weekly decline as the continued US focus on its blockade and economic pressure on Iran eased fears of renewed fighting in the Middle East, though shipping attacks remained a supply risk. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
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