KUALA LUMPUR: Malaysian palm oil futures rose over 3% on Friday, logging their biggest weekly jump in five years, tracking strength in rival oils and on increased demand from key consumer China ahead of Golden Week holiday. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed up 107 ringgit, or 3.6%, at 3,082 ringgit ($749.88) a tonne, hitting its highest since Jan. 13.
It has gained 9.6% in the week and logged its sharpest weekly rise since Sept. 25, 2015. "The market was sharply higher, mirroring solid gains in palm olein and soyabean oil on Dalian as speculative buying and hedging rise ahead of the Golden Week holiday," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
China, the world's second-largest palm oil buyer after India, will celebrate the week-long holiday starting from Oct. 1. Vegetable oils on the Dalian Commodity Exchange rose sharply as Yihai Kerry Arawana Holdings filed prospectus for an initial public offering of shares on the Shenzen Stock Exchange, and may continue to support palm oil prices on the Malaysia bourse, Varqa said.
The Southern Palm Oil Millers Association in Malaysia estimated output in some parts of the country during Sept. 1 to 15 rose 2.93% from the month before, traders said on Thursday, slowing from the 8.84% rise seen during Sept. 1 to 10. Dalian's most-active soyaoil contract gained 2.66%, while its palm oil contract rose 2.74%.
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