Palm oil post first weekly gain in three weeks
- Dalian’s most-active soyoil contract gained 0.21%
KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday and posted their first weekly gain in three weeks, as forecasts of a price recovery in the coming months at a key industry conference boosted sentiment.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.5%, to 4,462 ringgit ($1,093.09) a metric ton at the close. The contract rose 4.79% this week.
Leading industry analysts at the Indonesian Palm Oil Conference expect palm oil prices to recover in the coming months with the impact of El Niño-induced drought on production expected to materialise in the first quarter of 2027, mainly in top producer Indonesia.
However, sentiment was further restrained by uncertainty surrounding reports of a new service fee by Danantara Sumberdaya Indonesia, with market participants awaiting further details on its potential impact on the palm oil industry, a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract gained 0.21%, while its palm oil contract added 0.44%. Soyoil prices on the Chicago Board of Trade were up 0.79%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
The ringgit palm’s currency of trade, weakened 0.22% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Oil prices edged up but were headed for a second weekly decline as the continued US focus on its blockade and economic pressure on Iran eased fears of renewed fighting in the Middle East, though shipping attacks remained a supply risk. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.