Malaysian palm oil set to gain weekly on rival oils with Indonesia levied plan

Malaysian palm oils futures were up for a third session on Friday, and they are expected to rise weekly. This is due to the strength of rival edible oils on the Dalian and Chicago Exchanges as well as Indonesia's plans to increase its palm oil export tax.

By midday, the benchmark March palm oil contract on the Bursa Derivatives Exchange had gained 35 ringgit or 0.87% to 4,078 Ringgit ($1,003.94) per metric ton.

This week, the contract has gained 2.18%.

Anilkumar Bagani is the commodity research director at Mumbai-based Sunvin Group. He said that if Indonesian export levies increased, this would be beneficial for Malaysian palm oil export potential.

Eniya Listeiani Dewi, an official from the energy ministry, told reporters that Indonesia would likely increase its palm oil export tax to support the country’s?biodiesel mandat, citing tightening finances.

He said that the strength of rival crude oils and edible oils added to the contract's support.

Dalian's palm oil contract gained 0.42%, but its most active soyoil contract grew by 0.25%. Prices of soyoil on the Chicago Board of Trade rose by 0.73%.

Palm oil follows the price movement of competing edible oils as it competes to gain a share of the global vegetable oil market.

On Friday, oil prices rose for the?second consecutive day, indicating a third-weekly gain. This was due to uncertainty over the future of?supply from Venezuela, and concerns about Iranian output.

Palm oil is more attractive as a biodiesel feedstock due to the higher crude oil price.

Technical analyst Wang Tao stated that palm oil is biased to test support at 4,024 Ringgit per metric tonne, since it failed to break through resistance at 4,074 Ringgit.

(source: Reuters)