Palmettos end higher due to El Nino concerns; logs weekly gains

Prices for Malaysian palm oil futures rose on Friday, thanks to fears about the impact of El Nino.

At the close, the benchmark?palm-oil contract for November delivery at Bursa Malaysia's Derivatives exchange gained 27 ringgit or 0.55% to 4,931 Ringgit ($1,220.24) per metric ton. The contract rose 0.76%, recovering from last week's losses.

The closing crude palm oil futures were higher?on concerns about output in the medium-term amid El Nino weather conditions affecting both Malaysian and Indonesian, said David Ng a proprietary trader with Kuala Lumpur based?trading company Iceberg X Sdn Bhd.

Dalian's palm oil contract, which is the most active contract in Dalian, fell 0.39%. Chicago Board of Trade soyoil prices were down by 0.46%.

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

The oil price?eased, but was still heading for a week-long gain due to rising U.S. - Iran tensions that heightened fears over Middle East supply risks.

Palm oil is a less attractive option for biodiesel because crude oil futures are weaker.

Indonesia's attempt to control global prices by establishing a commodities exchange will struggle to compete against established bourses, and risk backfiring if the participation is compulsory.

Mohammad Abdul Ghani, Chief executive of Indonesian state-owned palm oil plantation company Agrinas Palma Nusantara, has also stated that the company aims to produce 1.5 million tonnes of palm?oil next year.

(source: Reuters)