KUALA LUMPUR: Malaysian palm oil futures ended a volatile session higher on Friday, logging their fourth straight weekly gain, as the country unveiled plans to fully exempt palm oil from export duty this year.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange settled up 0.95% at 2,348 ringgit ($550.66) a tonne, having fallen as much as 1.25% earlier. It gained 2.4% for the week.
The Malaysian market will be closed for a public holiday on Monday.
Gains on Friday were supported by stronger demand and estimates for lower production, said Marcello Cultrera, an institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Malaysia announced on Friday it would fully exempt palm oil from export duty this year, in a move that traders estimated could boost shipments of the edible oil by 1 million tonnes in the second half of year.
Meanwhile, palm oil output in May is likely to fall 1% from the previous month, traders said, citing estimates from the Malaysian Palm Oil Association (MPOA).
"MPOA estimates came as a surprise to the market as May production was expected to increase," a Singapore-based trader said. A Reuters survey predicted that Malaysian palm oil inventories at the end of May would rise 9.9% to their highest level in six months.
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