Malaysian palm oil futures recovered from earlier losses on Friday evening, edging up to end the trading day higher, as the market rose on a supportive price outlook by an industry analyst. The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange was up 0.2 percent at 2,170 ringgit ($524.53) a tonne at the end of the trading day.
The market has also gained 1.3 percent for the week. Trading volumes stood at 72,295 lots of 25 tonnes each at noon. "The market is looking forward on the price outlook," said a Kuala Lumpur-based trader, referring to the price forecast given by analyst Thomas Mielke at an industry conference in Mumbai.
Crude palm oil prices are seen trading between 2,200 ringgit and 2,600 ringgit a tonne in the first half of 2019, said Mielke, adding that there was limited downside potential at current price levels and that palm would bottom out at about 2,100 ringgit. Meanwhile, another industry analyst, Dorab Mistry, said that palm oil prices needed to go below 2,100 ringgit to remain competitive.
Mistry also pegged Malaysia's peak end-stocks at 3-3.3 million tonnes for the year, while estimating that Indonesia's inventories are currently close to 5 million tonnes and will keep rising. Malaysian inventories last rose to a seven-month high of 2.49 million tonnes in August, according to official data from a Malaysian industry regulator.
In other related oils, the Chicago September soyabean oil contract dropped as much as 0.6 percent, while the January soyabean oil contract on the Dalian Commodity Exchange rose 0.03 percent. Meanwhile, the Dalian January palm oil contract was down 0.4 percent. Palm oil prices are affected by movements of other edible oils, as they compete for a share in the global vegetable oils market.
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