Palm oil is on course for a second consecutive weekly gain

Malaysian palm futures continued to rise?on Friday, following the strength of crude oil prices.

By midday, the benchmark 'palm oil contract' for July delivery on the?Bursa Malaysia Derivatives exchange had gained 34 ringgit (0.74%) to 4,612 Ringgit ($1,162) per metric ton. Futures are up 0.33% this week, and on track to make their second straight weekly gain.

The futures market will remain firm due to the?improved fundamentals of Indonesia's supply news, which also reflects on Malaysian side. Also, there is renewed strength in?crude oil," said a Kuala Lumpur based trader.

Friday, May 1 will be a holiday.

The 'head' of Indonesia's palm oil producers association stated on Wednesday that the country's crude palm oils output could drop by as much as 2 million metric tonnes this year compared to the same period in 2025 due to El Nino and the dry weather, coupled with high fertiliser costs resulting from the Middle East war.

The oil prices increased on Thursday after a report that the U.S. was considering military action against Iran in order to break the deadlock of negotiations to end this war. This raised concerns about further supply disruptions for Middle East exports, which are already severely curtailed.

The palm oil price is more attractive as a feedstock for biodiesel due to the stronger crude oil futures.

Indonesia's Trade Ministry published a regulation on Thursday that showed the crude palm oil price reference for May at $1,049.58 a metric ton, an increase from $989.63 in April.

Dalian's palm oil contract, which is the most active contract, gained 1.48%. Chicago Board of Trade soyoil prices were up 0.65%.

Palm oil monitors?the movements in price of rival edible oils as it competes to?gain a share of the worldwide vegetable oils market.

The palm ringgit's currency has weakened by 0.48% compared to the dollar. This makes the commodity more affordable for buyers who hold foreign currencies.

According to Wang Tao, technical analyst, palm oil could test a "resistance" at 4,639 Ringgit per metric tonne. A break above this level would open the door to 4,693-4760 ringgit.

(source: Reuters)