Malaysian palm oil futures hit their highest close in more than six weeks on Friday and posted a second straight weekly gain, supported by stronger rival edible oils on the Dalian exchange and a weaker ringgit.
The benchmark palm oil contract for May delivery rose 1.65% to 4,136 ringgit ($933.63) per tonne on Friday, its second consecutive session of gains. The contract hit 4,170 ringgit a tonne in early trade, its highest since Jan. 4, and gained 5.22% for the week.
“Crude palm oil futures opened gap higher for the third straight day following bullish Chicago soy oil futures overnight and Dalian RBD palm olein, soy oil and ZCE rapeseed oil futures in Asian hours today,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Dalian’s most-active soyoil contract gained 2.61%, while its palm oil contract increased 3.49%. Soyoil prices on the Chicago Board of Trade were down 1.16%.
Palm is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Higher Indonesian tax and levy on palm oil exports for Feb. 16-28 also supported the contract, Bagani said.
Palm oil posts biggest gain in about 3 weeks on stronger rival oils
“The increase in Indonesia palm oil export levy and taxes… along with lower palm oil export availability until Ramadan is keeping sellers rigid to lower prices,” he added.
The Malaysian ringgit, palm’s currency of trade, slid 0.64% on Friday and lost 2.3% for the week. A weaker ringgit makes palm oil more attractive to foreign currency holders. Exports of Malaysian palm oil products for Feb. 1-15 were seen between 437,327 tonnes and 484,950 tonnes, compared with 401,749 tonnes to 453,771 tonnes shipped in Jan. 1-15, data from cargo surveyors Societe Generale de Surveillance and Intertek Testing Services, and independent inspection company AmSpec Agri Malaysia showed earlier this week.
India’s January palm oil imports fell 25% from December to their lowest in six months as a narrowing discount to rival oils prompted refiners to increase purchases of soybean and sunflower oils, a trade body said this week.