KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, recouping losses, to post their first weekly gain since mid-March, helped by optimism that a recovery in demand and tighter stocks in the world's No.2 producer will underpin prices.
Market participants are anticipating demand to trickle in from April as buyers begin to restock ahead
of the Muslim fasting month of Ramadan and the Eid al-Fitr festival, which typically drive up consumption
of the tropical oil.
The Islamic holy month starts late June this year.
"Investors foresee that palm will have better demand in the coming months," said a trader with a
foreign commodities brokerage in Kuala Lumpur.
"People should start buying for their Ramadan requirement ... export numbers for the first ten days (of
April) look brighter."
The benchmark June contract on the Bursa Malaysia Derivatives Exchange inched up about 1
percent to 2,659 ringgit ($811) per tonne by Friday's close.
Benchmark palm prices are up 0.2 percent this week, taking a breather after falling every week since
mid-March.
Total traded volume stood at 35,650 lots of 25 tonnes, just above the average 35,000 lots.
Technicals showed Malaysian palm oil is expected to retest a support at 2,613 ringgit, said Reuters
market analyst Wang Tao. A break below that would lead to a further loss towards 2,519 ringgit per tonne,
he said.
Investors will be watching out for a key industry report on Malaysia's end-stocks, output and exports
in March that will be released next week.
Despite sluggish demand from major consumers, India and China, Malaysian palm oil stocks are widely
expected to fall from the 1.66 million tonnes at end-February.
A Reuters poll of six planters and traders pegged end-March stocks at 1.58 million tonnes, their lowest
in more than three years, after the crop-damaging dry weather earlier this year continued to curb yields.
In other markets, Brent crude oil rose further above $106 a barrel on Friday as investors cast doubt on
reports that Libya's major oil ports were about to reopen, boosting dramatically supply of high quality
fuel to world markets.
In other competing vegetable oil markets, the U.S. soyoil contract for May gained 1.0 percent in
late Asian trade, while the most active September soybean oil contract on the Dalian Commodities
Exchange rose 1.2 percent.
Palm, soy and crude oil prices at 1010 GMT
Contract Month Last Change Low High Volume
MY PALM OIL APR4 2685 +10.00 2680 2685 10
MY PALM OIL MAY4 2681 +33.00 2655 2681 1112
MY PALM OIL JUN4 2659 +25.00 2632 2665 19996
CHINA PALM OLEIN SEP4 6260 +48.00 6218 6268 341150
CHINA SOYOIL SEP4 7066 +80.00 7016 7068 478240
CBOT SOY OIL MAY4 42.09 +0.42 41.62 42.15 6587
NYMEX CRUDE MAY4 101.05 +0.76 100.28 101.13 15300
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
($1 = 3.279 Malaysian ringgit)
($1 = 6.2123 Chinese yuan)- Reuters
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