Palm oil to rise for fifth week on lower stock expectations and biodiesel optimism

Malaysian palm oil futures were up on Friday and headed for a fifth consecutive weekly gain. This was due to expectations of lower inventories, Indonesia’s B50 biodiesel plans, and increased Middle -East tensions.

By midday, the benchmark contract for palm oil delivery in June on the Bursa Derivatives Market gained 25 ringgit or 0.52% to 4,816 Ringgit ($1,194.44) per metric ton. This week, it has gained 3.76%.

Lower March-end stocks ?in Malaysia, the possibility of Indonesia implementing its B50 biodiesel mandate, highly volatile crude oil ?prices and uncertaintysurrounding U.S President Donald Trump's policies have kept prices elevated, said Sandeep Singh, ?director of The Farm Trade, a Kuala Lumpur-based consulting and trading company.

He added that some buyers are also re-entering the market following a long wait. However, prices over?4,900 Ringgits are seen as 'too expensive.

On April 10, the Malaysian Palm Oil Board is expected to release its March demand and supply data.

The oil prices surged overnight, with U.S. Crude settling over 11% higher than Thursday's closing price and Brent gaining nearly 8%. The oil markets will be closed on Friday due to a public holiday.

Dalian's palm oil contract rose by 0.34%, while the most active soyoil contract increased by 0.28%. Chicago Board of Trade closed due to a public holiday.

Palm oil tracks the price movements of competing edible oils in its competition for a piece of the global vegetable oil market.

The palm ringgit's currency has firmed by 0.1% against the dollar, increasing the price of the commodity for foreign currency buyers.

Five dealers reported that India's palm oils imports dropped?nearly? 19% in March as refiners slowed down purchases to wait for a correction. ($1 = 4.0432 ringgit)

(source: Reuters)