Palm prices rise on strong demand and lower production but the sixth weekly gain is halted.

Malaysian palm futures have ended six weeks of gains, with a weekly drop. This is despite the fact that they closed higher on Thursday due to expectations of lower production and strong demand coming from key destinations.

At the close, the benchmark contract for palm oil delivery in September on Bursa Derivatives Exchange rose 47 ringgit or 1.19% to 4,012 Ringgit ($949.36). This week, the contract dropped 2.57%. Bursa Derivatives Malaysia Exchange will be closed Friday due to a public holiday.

David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn Bhd. He said that crude palm oil futures were higher due to the expectation of continued growth in production and exports over the next few weeks.

He added, "We are seeing a slowdown in the production rate and a robust demand for future years."

On July 10, the Malaysian Palm Oil Board will release its June demand and supply data.

Dalian's palm oil contract, which is the most active contract, rose by 0.43%. Chicago Board of Trade soyoil prices were down by 0.06%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.

Investors remained cautious over the Iran-Israel ceasefire and also shifted their focus to market fundamentals.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's trade currency strengthened by 0.21% against dollars, increasing the price of the commodity for buyers who hold foreign currencies.

Exports of palm oil products from Malaysia for the period June 1-25 increased between 6.6% to 6.8% compared with a similar period last month.

A circular posted on the Malaysian Palm Oil Board's website revealed that Malaysia had lowered the crude palm oil price reference for July, which reduced the export duty from 10% to 8.5%.

(source: Reuters)