Palm settles higher, but suffers third consecutive weekly decline

Malaysian palm futures settled higher on Friday due to a rise in crude oil prices. However, the contract recorded its 'third consecutive weekly decline.

The benchmark palm oil contract for July delivery at Bursa Derivatives Exchange rose 24 ringgit (0.55%) to $4,417 ringgit (1,119.08 USD) per metric ton.

This week, the contract dropped by 1.95%.

This week, the market was weighed down by a lack of demand in key markets, soft rival oils, and uncertainty over Indonesia's biodiesel mandate.

A Kuala Lumpur trader attributed Friday's increase to crude oil prices "remaining above $100 overnight" and the bullish momentum continuing into the Asian morning session.

Prices of oil jumped more than 3% when U.S. president Donald Trump stated that his patience with Iran was running out. This added to the concerns about the lack of progress in a deal to stop ship attacks and seizure around the Strait of Hormuz.

Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.

Dalian's palm oil contract, which is the most active contract in Dalian, fell by 0.63% while soyoil prices dropped by 1.33%. Prices of soyoil on the Chicago Board of Trade rose by 0.41%.

Palm oil tracks the price movements of competing edible oils as it competes to gain a share in the global vegetable oils market.

Exports of palm oil products from Malaysia for the period May 1-15 were estimated to have fallen between 1.6% and 16% compared to a month ago.

The palm ringgit's currency of trade has weakened by 0.43% compared to the dollar, making it slightly cheaper for buyers who hold foreign currencies.

(source: Reuters)