Palm oil set for fifth weekly gain on output concerns
21/02/2025 (New Straits Times), Kuala Lumpur - Malaysian palm oil futures rose on Friday and were on track for a fifth consecutive weekly gain, in what would be their longest winning run in three years, as expectations of weaker production supported the market.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained RM58, or 1.25 per cent, to RM4,700 (US$1,063.83) a metric ton by the midday break.
The contract has risen 2.47 per cent so far this week.
The market is trading higher due to expectations of a weaker output in Malaysia, which may lower overall stock levels in the country, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian's most-active soyoil contract rose 0.05 per cent, while its palm oil contract added 1.44 per cent. Soyoil prices on the Chicago Board of Trade were down 0.5 per cent.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices extended gains, headed for a weekly increase, as falling inventories of US gasoline and distillate raised expectations of solid demand while concerns over supply disruptions in Russia lent support.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Cargo surveyors estimated that exports of Malaysian palm oil products during February 1-20 fell between 0.3 per cent and 8.1 per cent, compared with the same period a month earlier.
Indian refiners have cancelled orders for 70,000 metric tons of crude palm oil scheduled for delivery between March and June because of a surge in benchmark Malaysian prices and negative refining margins in India, four trade sources said.
Palm oil may break resistance at RM4,714 per ton and rise into a range of RM4,755 to RM4,780 ringgit, Reuters technical analyst Wang Tao said.