Palm oil reverses early gains but logs weekly jump on demand
KUALA LUMPUR: Malaysian palm oil futures reversed early gains on Friday after hitting a two-week high, but clocked their first weekly gain in four on robust demand, a weaker ringgit and stronger rival edible oils.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange fell 54 ringgit, or 1.38%, to 3,869 ringgit ($832.94) per metric ton, after a three-day climb.
The contract had earlier risen as much as 1.1%.
For the week, the contract has jumped 4.09%.
“The palm oil market was supported this week by strong Indian and European demand as well as the forward expectations of higher priced soybean oil given the strong crushing activity and domestic demand in the United States,” said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.
However, higher mid-term palm inventories and revised Indian export duties for palm and soft oils were pressuring prices, Cultrera added.
The European Union said on Thursday it had launched an investigation into whether biodiesel from Indonesia was circumventing EU duties by going through China and Britain.
The ringgit, palm’s currency of trade, has declined 1.3% against the dollar so far this week, making the edible oil cheaper for buyers holding foreign currency.
Dalian’s most-active soyoil contract rose 0.7%, while its palm oil contract gained 0.7%.
Soyoil prices on the Chicago Board of Trade were down 0.08%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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