KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, and logged a weekly gain, though expectations of higher output capped their gains.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 7 ringgit, or 0.18%, to 3,827 ringgit ($905.16) a metric ton at the close.
The contract gained 0.18% this week. Crude palm oil prices erased most of the morning gains after the release of the Malaysian Palm Oil Association’s (MPOA) production data for the May 1-20 period, a Kuala Lumpur-based trader said.
The trader shared that MPOA estimated production during that period rose 3.51% month-on-month. Dalian’s most-active soyoil contract rose 0.18%, while its palm oil contract shed 0.32%. Soyoil prices on the Chicago Board of Trade rose 1.16%. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices dropped for a fourth consecutive session on Friday and were set for their first weekly decline in three weeks, weighed down by rising expectations of another large OPEC+ output increase for July.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.98% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.