Palm range bound ahead of key data but set for weekly gains
Malaysian palm futures were in a range on Friday but still set to gain for the second week running as traders awaited crucial data about demand and supply. Meanwhile, Indonesia's plans for biodiesel supported prices.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery had fallen 10 ringgit or 0.22% to 4,581 Ringgit ($1,085.55) per metric ton. The contract is up 3.44% this week.
David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn. Bhd. He said that the market expects a negative report from the Malaysian Palm Oil Board.
Ng said that Indonesia's B50 Biodiesel Plan was supporting the prices.
Indonesia announced on Thursday that it would implement its B50 Biodiesel Programme in the second half 2026. The plan could mean that Indonesia will not need to import diesel in the future.
Indonesia has said that it will require 5.3 million additional tons of crude palm oil in order to meet its B50 mandatory biodiesel plans by 2026.
Dalian's palm oil contract also rose by 0.55%. Chicago Board of Trade soyoil prices fell by 0.14%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Early Asian trade saw little change in oil prices after they fell more than 1% Thursday. The market's premium for war risk has faded since Israel and Hamas reached an agreement on the first phase of the plan to end Gaza's conflict.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The dollar has weakened by 0.14%, which makes palm slightly cheaper for foreign currency buyers. $1 = 4.2200 Ringgit (Reporting and editing by Ashley Tang, Sumana Nandy, and Subhranshu S. Sahu).
(source: Reuters)