Palm closes more than 1% higher, logs third week of gains

KUALA LUMPUR: Malaysian palm oil futures settled more than 1% higher on Thursday, extending gains to a third consecutive week, as firmer Dalian oils supported the market, while profit-taking limited gains in a holiday truncated week.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 84 ringgit, or 1.86%, to 4,612 ringgit ($1,171.75) a metric ton at the close.

Palm traded higher, buoyed by firmer Dalian oils, but profit-taking emerged before the extended Eid holidays, a Kuala Lumpur-based trader said.

The market will be closed on Friday for a public holiday and trading will resume on March 24.

“Some market participants are also staying on the sidelines due to the long weekend, limiting further upside momentum,” the trader added.

Dalian’s most-active soyoil contract rose 0.12%, while its palm oil contract shed 0.43%. Soyoil prices on the Chicago Board of Trade gained 0.4%.

Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.

Oil prices jumped, with benchmark Brent rising to its highest in more than a week to more than $115 a barrel, after Iran attacked energy facilities across the Middle East following Israel’s strike on its South Pars gas field, marking a major escalation in the war.

Stronger crude makes palm a more attractive option for biodiesel feedstock.

Crude palm oil is expected to remain above 4,450 ringgit ($1,130) per metric ton in the near-term due to rising energy prices and the Middle East uncertainty, the Malaysian Palm Oil Council said.

Malaysia’s fertiliser makers are suspending new orders as supply-chain disruptions and feedstock shortages from the conflict drive up raw material prices, threatening to raise output costs for palm oil producers.

The ringgit, palm’s currency of trade, weakened 0.59% against the dollar, making the commodity cheaper for buyers holding foreign currencies.