KUALA LUMPUR: Malaysian palm oil futures rose for a fifth straight session and booked a weekly gain on Friday, amid supply concerns as heavy rains in the country were exacerbating already weak production levels.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 138 ringgit, or 2.82%, to 5,023 ringgit ($1,131.31) a metric ton at the close.
The contract rebounded to log a weekly gain of 8.21%, the highest since June 2023, after falling for the past two consecutive weeks. The incessant rains, especially in the east coast and northern parts of peninsular Malaysia, will further aggravate the already weak production levels in the country, said Paramalingam Supramaniam, director at Selangor-based brokerage firm Pelindung Bestari.
“Many other states too are on the lookout for further worsening flooding woes. The overall sentiment also remains fragile and supply constraints will likely keep prices defensive,” he said. Palm oil stocks fell 6.32% in October to 1.88 million tons, while crude palm oil production dropped 1.35% to 1.80 million tons, according to data released from the Malaysian Palm Oil Board (MPOB) earlier this month. Dalian’s most-active soyoil contract rose 1.49%, while its palm oil contract added 3.05%. The Chicago Board of Trade was closed for the Thanksgiving holiday.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Cargo surveyors are expected to release their estimates for Malaysian palm oil exports for the Nov. 1-30 period on Saturday.
Oil prices fell, heading for a weekly drop of more than 3%, as concerns over supply risks from the Israel-Hezbollah conflict eased, alleviating earlier disruption fears. Brent crude futures for January fell 0.68% to $72.78 a barrel, as of 1013 GMT. The ringgit, palm’s currency of trade, strengthened 0.09% against the dollar, making the commodity more expensive for holders of foreign currencies.
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