KUALA LUMPUR: Malaysian palm oil futures ended lower on Friday after trading in a tight range, although the contract recorded a third straight weekly jump, underpinned by concerns over tight supply amid improving demand.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed down 32 ringgit, or 0.76%, at 4,203 ringgit ($948.12) a tonne, hovering near a seven-week high hit on Thursday.
The contract has gained 1.7% this week.
“Palm oil demand in India is picking up as the summer season approaches alongside improving demand in China, but global supply is tight due to restrictive export policies in top exporter Indonesia,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Adding to supply concerns, Refinitiv Agriculture Research in a note said floods will impact western Indonesia and Malaysia palm oil regions, with Malaysia likely to face significant crop damage.
Malaysia, the world’s second-largest producer, expects the prices of crude palm oil to average 4,000 ringgit ($902.93) per tonne this year, the government said.
Palm near seven-week high on stronger crude oil
Prime Minister Anwar Ibrahim unveiled a scaled-back spending plan for the year and plans to tax the wealthy as the nation focuses on narrowing the budget deficit while supporting a slowing economy.
Dalian’s most-active soyoil contract gained 0.8% while its palm oil contract rose 1.2%. Soyoil prices on the Chicago Board of Trade gained 0.6%.
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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