JAKARTA: Malaysian palm oil futures fell for a third straight week, but notched gains on Friday on supply concerns and as rival oils on the Dalian commodity exchange strengthened.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed 0.6% higher at 5,540 ringgit ($1,324.09) a tonne.
Supply concerns over Indonesia’s domestic market obligation policy supported prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Improved exports also supported prices, as cargo surveyors said Feb. 1-15 exports surged between 11% and 24% month-on-month, while a millers’ association pegged a 0.46% uptick in production.
Dalian’s palm oil contract jumped 3.07%, while its most-active soyoil contract rose 1.83%. Meanwhile, soyoil prices on the Chicago Board of Trade slipped 0.01%.
“Gains capped by weak soyoil prices in Chicago Board of Trade and crude oil,” a Kuala Lumpur-based trader told Reuters.
Crude oil prices extended losses and were headed for a weekly fall, as the prospect of extra supply from Iran returning to the market eclipsed fears of a possible supply disruption arising from a Russian invasion of Ukraine.
Weaker crude prices make palm a less attractive option for biodiesel feedstock.
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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