SINGAPORE: Malaysian palm oil futures rose for a second consecutive session on Friday as investors assessed the prospects of production cuts in Malaysia.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 24 ringgit, or 0.7%, and last traded at 3,681 ringgit ($791.27) a metric ton at closing. The benchmark contract fell 1.1% this week, recording its second consecutive week of losses.
“Expectations of tightening supplies in Malaysia supported prices, but uncertainties around tropical oil exports demand capped the gains,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
Malaysia’s palm oil inventories by end-December likely fell further, despite shrinking exports, as production declined, according to a Reuters survey.
Analysts also expect a decrease in palm oil stocks as the festive season concludes. India’s palm oil imports in December rose to their highest in four months as purchases of refined palmolein surged because of competitive prices, five dealers told Reuters. Dalian’s most-active soyoil contract was up 0.1%, while its palm oil contract gained 0.6%. Soyoil prices on the Chicago Board of Trade climbed 0.5%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Hot, dry weather in Brazil, the world’s biggest soybean exporter, had raised concerns over the availability of supply. However, these worries have faded after the rains earlier this week. There have also been more supplies from other South American producers like Argentina.
The Malaysian ringgit, palm’s currency of trade, weakened 0.3% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Asian stocks wobbled on Friday, keeping global equities on track to snap a nine-week winning streak, while the dollar was poised for its strongest weekly advance since mid-May as bets on aggressive Federal Reserve rate cuts were rolled back.
Comments
Comments are closed.