Palm oil hits 15-week high, posts third weekly gain

JAKARTA: Malaysian palm oil futures rose to a 15-week high on Friday, supported by strong oil prices and a rebound in Dalian’s palm olein futuresand posted a third straight weekly gain.

The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange gained 13 ringgit, or 0.28%, at 4,723 ringgit ($1,155.33) a metric ton at the close. The futures booked a 2.74% weekly gains.

“The futures opened gap higher in continuation of the newly triggered bullish rally, following a persistent bullishness in energy prices, a resurgent Dalian’s palm olein futures, perspective tightness in palm oil export from Indonesia due to newly launched B50 biodiesel mandate and fresh demand from China,” said Anilkumar Bagani, commodity research head at Sunvin Group.

Dalian’s most-active soyoil contract gained 1.33%, while its palm oil contract rose 1.66%. Soyoil prices on the Chicago Board of Trade dropped 0.99%.

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

Brazil could more than triple its planted area for producing palm oil over the next decade by expanding cultivation on already deforested land in the Amazon, said Victor Almeida, president of industry association Abrapalma.

The 2026/27 soybean crop in Brazil, set to be sown around September, is expected to fall 2% to 178 million tons from a record last cycle, while challenging market conditions may lead to a stabilisation in the planted area, Rabobank said on Thursday.

Oil futures prices retreated on Friday but are still set for hefty weekly gains because of concerns about disrupted energy flows in the Red Sea and fears of further escalation in the U.S.-Israeli war with Iran.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.