JAKARTA: Malaysian palm oil futures closed higher on Friday tracking rival oils, although the ringgit’s persistent strength capped the upside momentum.
The contract fell 0.63% this week, a second consecutive weekly drop. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 47 ringgit, or 1.21%, to 3,917 ringgit ($871.41) a metric ton on the closing.
“Signs of recovery in Dalian palm olein and Chicago’s soyoil have lifted the futures today. Nonetheless, the persistent strength of the ringgit has capped the upside momentum,” a Kuala Lumpur-based trader said. The ringgit, palm’s currency of trade, strengthened 1.58% against the US dollar, making the vegetable oil less attractive for foreign currency holders.
Dalian’s most-active soyoil contract rose 0.82% higher, while its palm oil contract gained 2.1%. Soyoil prices on the Chicago Board of Trade were up 0.99%.
Palm oil tracks price movements of rival edible oils, as they compete for a share in the global vegetable oils market. India’s palm and soybean oil imports surged to their highest levels in about a year in July, as refiners increased purchases following a price correction and in anticipation of a potential import duty hike, dealers said on Friday. Indonesia’s biodiesel consumption in the first half of 2024 reached 6.12 million kilolitres, data from the energy ministry showed on Friday.
Meanwhile, Indonesia’s plan to revise domestic market obligation (DMO) rules for palm oil will not affect the DMO export ratio. Export quotas are set at four times the volume of palm oil that companies supply locally. Extra allotments are given to companies that sell in smaller, household-friendly sizes.
Malaysian palm oil exports in July were seen rising between 22.8% and 30.91%, cargo surveyor Amspec Agri and Intertek Testing Services said. Cargo surveyor Societe Generale de Surveillance (SGS) estimated exports stood at 1.48 million tons, according to LSEG, a 23.6% jump from June.
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