Palm on the rise on demand, set to end two-week losing streak
The price of palm oil in Malaysia rose on Friday, and traders expect stronger demand for the product from major markets during August.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for October delivery gained 42 ringgit (0.99%) to 4,282 Ringgit ($1,011.58) per metric ton. The contract is up 0.92% this week.
Paramalingam Supramaniam of brokerage Pelindung Bestari said that there is a return in demand for crude palm oil as well as refined products.
He said, "I believe that the demand for August is likely to be higher than it was in July."
On Monday, cargo surveyors will release their estimates of August 1-10 exports.
Dalian's palm oil contract grew 0.65%, while the most active soyoil contract dropped 0.12%. Chicago Board of Trade soyoil prices were down by 0.15%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils.
Early Asian hours saw little change in oil prices, but they were heading for their steepest weekly loss since late June, as investors expressed concerns about the impact of tariffs on the global economy that went into effect Thursday.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency, the dollar, has weakened by 0.07%, making it slightly cheaper for foreign buyers.
Technical analyst Wang Tao stated that palm oil could retest the resistance level of 4,312 Ringgit per metric tonne. A break above this would lead to gains in the range 4,344 to 4,374 Ringgit.
(source: Reuters)
