KUALA LUMPUR: Malaysian palm oil futures firmed on Friday and were headed for a weekly rise, on concerns over production disruptions from the arrival of the monsoon season, but the gains were capped by sluggish October exports.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 2 ringgit, or 0.05%, to 4,098 ringgit ($865.47) a tonne during early trade. For the week, the contract rebounded and is up 7% so far.
Storms and high risk of flooding during the year-end monsoon season — that lasts between October and January — are likely to disrupt harvesting activities and hurt production in the world’s second-largest palm producer. Exports of Malaysian palm oil products for Oct. 1-20 fell between 4.3% and 8.4% from the same week in September, according to two cargo surveyors. Another firm, AmSpec Agri Malaysia, estimated exports rose 3.3%.
Talks on extending a July deal that resumed Ukraine Black Sea grain and fertilizer exports are not making much progress because Russian concerns are not being taken into proper account, Russia’s UN ambassador in Geneva said on Thursday.
Dalian’s most-active soyoil contract rose 0.1%, while its palm oil contract fell 0.7%. Soyoil prices on the Chicago Board of Trade were down 0.2%.
Malaysia’s financial markets will be closed on Monday for the Diwali festival. Palm oil is biased to fall into a range of 3,958-4,001 ringgit per tonne, following its failure to break a resistance at 4,194 ringgit, Reuters technical analyst Wang Tao said.