KUALA LUMPUR: An eight-session rally helped Malaysian palm oil futures record their best week in nearly 5-1/2 years, underpinned by tight inventories and strength in rival soyaoil. The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 66 ringgit, or 1.63%, to close at 4,125 ringgit ($1,002.19) a tonne on Friday, hitting a fresh 13-year high.
The contract gained 10.27% in the week, charting 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 soyaoil contract rose 1.68%, while its palm oil contract gained 2.89%. Soyaoil prices on the Chicago Board of Trade were little changed.
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