KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, lifted by rival soyoil and anticipation of tight production, but the contract saw its first weekly decline in seven weeks.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange settled 57 ringgit, or 1.35%, higher at 4,274 ringgit ($1,013.52) a tonne.
Palm has declined 2.2% for the week so far.
A Reuters survey had projected July inventories likely expanded 1.6% to 1.64 million tonnes, but analysts said it remains below potential.
The Malaysian Palm Oil Board will release the official data on Aug. 11.
The market was volatile during morning trade ahead of production data from the Malaysian Palm Oil Association (MPOA), which was at the lower end of average estimates, said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
The MPOA estimated production in July to decline 5.97% from the prior month to 1.51 million tonnes, he said.
“Mixed trading on the Dalian exchange was also influencing the crude palm oil market.”
Key destination market China on Friday reported its highest daily count for new coronavirus cases in its current outbreak, igniting concerns rising cases would hurt demand for the edible oil.
Dalian’s most-active soyoil contract rose 0.8%, while its palm oil contract gained 0.7%. Soyoil prices on the Chicago Board of Trade were up 1.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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