JAKARTA: Malaysian palm oil futures closed higher on Friday for the seventh straight session, supported by gains in rival oils and lower palm production.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 60 ringgit, or 1.58%, at 3,854 ringgit ($829.71) a metric ton on the closing.
The benchmark logged a 4.67% weekly gain, the highest since Dec. 8.
“The benchmark trades in positive note for the seventh straight day amid lower palm production data coupled with continuous strength in rival oils,” a Kuala Lumpur-based trader said.
Data from the Malaysian Palm Oil Board (MPOB) on Wednesday showed inventories fell 4.64% month-on-month to 2.29 million metric tons as of December-end, the lowest since August.
Crude palm oil production plunged 13.31% from November to 1.55 million tons in December, while palm oil exports declined 5.12% to 1.33 million tons, MPOB said.
Palm ends higher on rival oils’ support
Dalian’s most-active soyoil contract fell 0.29% and its palm oil contract increased 1.44%. Soyoil prices on the Chicago Board of Trade rose 1.46%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
India’s palm oil imports surged to their highest in four months in December, driven by increased purchases of refined palmolein due to competitive prices, a leading trade body said on Friday.
Oil prices rose more than 2% on Friday as the United States and Britain carried out strikes against Houthi military targets in Yemen.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Palm oil prices are likely to rise to 4,000 ringgit per metric ton by the third quarter of this year, an executive from consultancy Glenauk Economics said on Thursday.
Malaysian palm oil output is set to improve this year as a labour shortages ease, although challenges remain as planters seek to comply with European and U.S. regulations targeting the sector’s alleged links to deforestation and forced labour, industry officials said at a seminar on Thursday.
Meanwhile, exports of Malaysian palm oil products for Jan. 1-10 fell 9.8% to 349,075 tons from a month earlier, independent inspection company AmSpec Agri Malaysia said on Wednesday.
Cargo surveyor Intertek Testing Services estimated exports of Malaysian palm oil products fell 3.9% to 354,465 metric tons.
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