JAKARTA: Malaysian palm oil futures closed higher for a third straight week of gains on Friday as a major industry conference in Bali revealed projections on production and prices of palm oil for 2024-2025.
The contract gained 4.77% this week, the highest since June 20, 2022. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 148 ringgit or 2.99%, to 5,100 ringgit ($1,164.38) a metric ton on the closing.
“The futures gapped up during opening and faced resistance at prices above 5,000 ringgit. However, it stayed supported near this level amid the broader vegetable oils rally, indicative of strong bullish sentiment,” said Darren Lim, Singapore-based brokerage Phillip Nova.
Malaysian benchmark palm oil futures has seen more than a 35% rise this year and is expected to trade above and around 5,000 ringgit ($1,141) per metric ton until June 2025, supported by tight supply and bullish demand, industry analysts said during a major industry conference in Bali on Friday.
Indonesia’s plan to raise the mandatory palm oil content of biodiesel to 40% next year from 35% will require an additional feedstock supply of around 3 million metric tons, a senior Indonesia Palm Oil Association (GAPKI) official said.
Global palm oil output is seen rising by 2.3 million tons in the October 2024 to September 2025 season, rebounding after a drop of 1.2 million tons in the 2023-2024 season, industry analyst Thomas Mielke said.
Dalian’s most-active soyoil contract rose 0.5%, while its palm oil contract gained 2.46%. Soyoil prices on the Chicago Board of Trade were up 0.7%. Palm oil tracks the price movements of rival edible oils as it competes for a share in the global vegetable oils market. The ringgit, palm’s currency of trade, strengthened 0.45% against the US dollar, making the vegetable oil more expensive for buyers holding foreign currencies.
Oil prices fell slightly as the risk of a hurricane in the Gulf of Mexico significantly affecting US oil and gas output declined, while the market weighed how President-elect Donald Trump’s policies might affect supplies. Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Comments
Comments are closed.