- Dalian's most-active soyoil contract rose 1.72%, while its palm oil contract gained 3.25%. Soyoil prices on the Chicago Board of Trade were up 0.4%.
KUALA LUMPUR: An eight-session rally kept Malaysian palm oil futures on track for their best week in nearly five-and-a-half years, as tight inventories and strength in rival soyoil underpinned the market.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 72 ringgit, or 1.77%, to 4,132 ringgit ($1,004.86) a tonne by the midday break on Friday, hitting a fresh 13-year high.
The contract has gained 10.45% so far in the week, heading for its biggest weekly jump since Sept. 25, 2015.
Palm oil supply is tight as end-February inventories fell more than expected while production declined to its lowest in five years, industry regulator Malaysian Palm Oil Board data showed this week.
Meanwhile, key buyer India has been ramping up purchases of crude palm oil as import and processing margins recovered, said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
Analysts and brokers expect palm oil stocks to grow marginally in March as production is expected to recover.
"Strength persisting in rival oilseeds during Asian trading hours could keep market sentiment upbeat for palm," a Kuala Lumpur-based trader said.
Dalian's most-active soyoil contract rose 1.72%, while its palm oil contract gained 3.25%. Soyoil prices on the Chicago Board of Trade were up 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.