JAKARTA: Malaysian palm oil futures posted a weekly jump as prices rose for a second straight session on Friday, buoyed by signs of a pickup in demand from key buyers and gains in rival Dalian oils.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 3.66% to close at 4,420 ringgit ($994.94) per tonne. It posted a 13.98% gain for the week, rebounding from the previous week’s 9.6% drop.
“The market is still optimistic about demand,” a trader in Kuala Lumpur said, referring to growth in exports to main markets such as China, India and the European Union in the first 10 days of August.
Exports of Malaysian palm oil products for Aug. 1-10 rose about 10% monthly, cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia said this week.
The bullish momentum on the Chicago Board of Trade and China’s vegetable oil futures helped palm rally amid short covering and bargain buying this week, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“A significant recovery is being witnessed in palm oil prices for last couple of days as rally in CBOT soy oil gave space to palm oil to move higher, keeping its wide discount intact,” he said.
Dalian’s most-active soyoil contract was up 1.52%, while its palm oil contract rose 3.27%. Soyoil prices on CBOT were down 0.22% on Friday after a six-day rally.
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 rise to 4,452 ringgit, as it has more or less broken a resistance at 4,269 ringgit per tonne, Reuters technical analyst Wang Tao said.