Palm oil climbs for fourth week on hopes of December supply squeeze

KUALA LUMPUR: Malaysian palm oil futures inched higher on Friday to log a 6% weekly gain, underpinned by tight December supply outlook ahead of industry data.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed 3 ringgit higher, or 0.08%, to 3,820 ringgit ($947.89) a tonne, rising in seven of the last eight sessions.

The contract also logged its fourth consecutive weekly gain.

Lack of fresh news, cautious trading and additional weekend profit-taking ahead of data from Malaysian Palm Oil Board, USDA (US Department of Agriculture) and cargo surveyors kept the market directionless before the midday break, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Jan. 1-10 export is seen lower and added pressure prices in the second half, he added.

The Malaysian Palm Oil Board is scheduled to release December supply and demand data on Monday.

A Reuters survey pegged December end-stocks to tumble to their lowest in more than 13 years at 1.22 million tonnes. Production was seen falling 11% from the month before, while export likely rose 15%.

Malaysia will delay the nationwide rollout of its B20 palm oil biodiesel mandate to early 2022, state news agency Bernama reported, following in Indonesia's footsteps to delay its B40 mandate.

Palm oil prices are likely to remain high in the first quarter but "fall dramatically" during the second half of the year as palm and oilseed plantings pick up, two leading industry analysts on Thursday.

Dalian's most-active soyoil contract lost 0.02%, while its palm oil contract slipped 0.5%. Soyoil prices on the Chicago Board of Trade were down 0.2%.

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