KUALA LUMPUR: Malaysian palm oil futures ticked up on Friday and logged a weekly gain, as bargain buying lifted the contract after prices fell due to a smaller-than-expected decline in November stockpile.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange closed 22 ringgit, or 0.46%, higher at 4,800 ringgit ($1,140.14) a tonne, after declining to an intraday low of 1.1%.
Palm has gained 3.2% so far this week.
Malaysia's palm oil exports during Dec. 1-10 was unchanged from the same period in November at 544,059 tonnes, cargo surveyor Amspec Agri said.
Palm oil falls for second day on fears of lower Dec exports
End-November stockpile in the world's second largest producer fell 0.96% from a month earlier to 1.82 million tonnes, Malaysian Palm Oil Board data showed. This was much slower than a Reuters' survey pegging a 3.5% decline.
Crude palm oil production shrank more than expected, down 5.3% from October to 1.63 million tonnes. Exports rose 3.3% to 1.47 million tonnes, much smaller than market estimates.
"We expect prices to consolidate at current levels. The overall sentiment will remain defensive, with traders maintaining a buy-on-dips strategy," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Planters in the world's second-largest producer are racing to adjust to an acute shortage of workers due to the coronavirus and sharply higher costs of recruitment as they make changes in response to accusations of forced labour.
Dalian's most-active soyoil contract fell 2%, while its palm oil contract lost 2.1%. Soyoil prices on the Chicago Board of Trade were up 0.5%.
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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