VEGOILS - Palm closes on 15-month-high, logs 5th straight weekly gain
Malaysian palm futures rose almost 1% on Friday, logging a fifth consecutive weekly gain, driven by expectations for lower inventories and Indonesia's plans to produce B50 biodiesel, as well as heightened Middle East tensions.
The benchmark palm oil contract on Bursa Derivatives Exchange for 'June' delivery gained 47 ringgit (0.98%) to 4,838 Ringgit ($1,201.09), the highest closing price since December 13, 2024. The contract rose 4.47% in the past week.
Low March-end stock levels in Malaysia, the possibility that Indonesia will implement its B50 Biodiesel mandate and volatile crude oil prices have all contributed to high prices, according to Sandeep Singh, director of The Farm Trade a Kuala Lumpur based consultancy and trading firm.
He added that some buyers are reentering the market, even though prices over 4,900 ringgits are considered too high.
A survey shows that Malaysian palm oil inventories dropped by the most in three years in March, to their lowest level since July last year, due to a spike in exports, which more than offsets a modest rise in production.
On April 10, the Malaysian Palm Oil Board is expected to release its March demand and supply data.
Brent oil prices jumped nearly 8% in volatile trading on Thursday, while U.S. Crude settled more than 11% higher. Oil markets will be closed Friday due to a public holiday.
Dalian's palm oil contract rose by 0.59%, while the most active soyoil contract grew by 0.53%. Chicago Board of Trade was closed for a holiday.
As palm oil competes to gain a share of the global vegetable oil market, it tracks the price fluctuations of its rival edible oils.
The palm ringgit's currency of trade firmed by 0.2% against the US dollar, making it more expensive for buyers with foreign currencies.
Five dealers reported that India's palm oil imports dropped nearly 19% in March as a result of a surge in the price of tropical oils, which tracked energy markets. This prompted refiners, who were tracking these markets, to reduce purchases in order to wait for a correction. ($1 = 4.0480 ringgit)
(source: Reuters)
