- Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
KUALA LUMPUR: Malaysian palm oil futures rose nearly 2% on Friday, setting them on course for a second straight weekly gain, on expectations of tight global supply and strong demand as China, the world's second-largest importer, increased its purchases.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange was up 73 ringgit, or 1.93%, at 3,864 ringgit ($934.69) a tonne by the midday break.
Palm has gained 3.4% this week.
"China on Thursday bought 150,000 tonnes of refined, deodorised, bleached (RBD) palm oil subscriptions for June-July deliveries starting late-May, hence, the volatility in prices," said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Huge tender volumes for crude palm oil are also pushing up prices, he added.
Traders are awaiting for the US Agriculture Department's monthly soybean supply and demand report due Friday, and the Malaysian Palm Oil Board's report due Monday, with expectations that supply for both edible oils will remain tight.
A Reuters' poll expects Malaysia's palm oil stockpile at end-March to rise 1.3% from the previous month to 1.32 million tonnes.
Malaysia's Sime Darby Plantation on Thursday brought back over 100 migrant workers from Bangladesh as part of a pilot scheme in collaboration with the government to overcome labour shortages caused by the pandemic and a freeze on recruitment of new foreign workers.
Dalian's most-active soyoil contract fell 0.8%, while its palm oil contract declined 0.6%. Soyoil prices on the Chicago Board of Trade gained 0.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may test a support at 3,761 ringgit per tonne, a break below which could cause a fall to 3,659 ringgit, Reuters technical analyst Wang Tao said.