KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, logging a sixth consecutive weekly gain, despite weak demand in key markets.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange rose 11 ringgit, or 0.27%, to 4,115 ringgit ($968.24) a metric ton, the highest closing price since April 15.
The contract gained 4.79% this week. Trading volumes have been relatively thin and prices have largely factored in most internal and external variables, Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari, said.
“Going forward, sustaining the current trend will require additional bullish news to emerge. The demand side will be particularly crucial in July as the current market rally has been premised solely on external factors and has not yet demonstrated a robust increase in demand.”
Dalian’s most-active soyoil contract rose 0.44%, while the palm oil contract gained 0.05%. Soyoil prices on the Chicago Board of Trade were up 1.5%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market. Cargo surveyors estimated that exports of Malaysian palm oil products during June 1-20 rose between 10.9% and 14.3%, compared with the same period a month ago.
Oil prices fell, but remained on course for a third consecutive weekly rise, after the White House delayed a decision on US involvement in the Israel-Iran conflict.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.16% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
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