Palm logs near 1pc weekly fall as December exports slow

KUALA LUMPUR: Malaysian palm oil futures firmed on Friday as rival Dalian oils rallied, although the benchmark contract fell for the week on slowing exports.

The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 4 ringgit, or 0.12pc, to 3,407 ringgit ($841.23) a tonne, rising for a second straight session.

It fell 0.9pc this week, snapping a two-week winning streak.

Malaysia's palm oil end-stocks in November fell to a more than three-year low of 1.56 million tonnes as production slumped and exports declined more than expected, according to Malaysian Palm Oil Board data on Thursday.

November inventories, lowest in 10 years for the month, and tight stocks and Indonesia's revised export levy will likely continue to support crude palm oil prices, Ivy Ng, regional head of plantations research at CGS-CIMB Research, said in a note.

Kenanga Investment Bank forecast December inventories to shrink 5.6pc month-on-month and exports to decline slightly as demand is expected to pick up ahead of the year-end holidays.

Palm oil exports from Malaysia during Dec. 1 to 10 fell between 6pc and 11pc from the month before as shipments to China shrank by more than half, cargo surveyors said on Thursday.

"Key factors influencing prices are the La Nina impact on oilseeds and palm oil supply, weather development in South America, China's purchases to build up its stock reserves, and policies on biodiesel mandates," Ng said.

Dalian's most-active soyoil contract rose 2pc, while its palm oil contract gained 3pc. Soyoil prices on the Chicago Board of Trade were up 0.4pc.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil rose on Friday, making the edible oil more attractive as biodiesel feedstock.