VEGOILS-Palm ends four-week losing streak amid weak demand, elevated stocks
Malaysian palm-oil futures ended Friday on a high note, ending a four week decline despite concerns about a weak demand for November and higher inventories.
At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery remained at 4,125 Ringgit ($976.56) per metric ton. The contract increased by 0.39% in the past week.
The market is under pressure due to the combination of a stronger ringgit and lower November demand. Meanwhile, the high-end stock prices are making it difficult to determine a bottom.
Malaysian production will surpass 20 million tonnes for the first-time in 2025. The record output could mean that it ends the year with more than expected stocks.
The palm oil stock in Malaysia had increased for the eighth month in a row to reach a 6-1/2 year high at the end of October. This was due to the highest production in the last decade, which outweighed an increase in exports.
Exports of palm oil products from Malaysia for the period November 1-10 were estimated to have fallen between 9.5% and 12,3% compared with the same period one month earlier.
Dalian's palm oil contract, which is the most active contract, fell 0.8%. Chicago Board of Trade soyoil prices were up by 0.44%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The palm's trade currency, the ringgit (the palm's currency), has weakened by 0.1% against the US dollar, making it slightly cheaper for buyers with foreign currencies.
The oil price rose by about 2% after supply concerns arose following the Black Sea port's Novorossiysk stopping oil exports in response to a drone attack from Ukraine that targeted an oil depot at the main Russian energy hub.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Fadhil hasan, a GAPKI official, said that Indonesian palm oil production in 2026 will grow by 3% to 4 % annually. This is a slowdown from the estimated growth of 4% to 7 % this year.
(source: Reuters)
