JAKARTA: Malaysian palm oil futures extended gains to a third session on Friday and were set for a weekly rise, supported by strength in rival edible oils on the Dalian and Chicago exchanges and Indonesia’s plan to raise its palm oil export levy.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 35 ringgit, or 0.87%, to 4,078 ringgit ($1,003.94) a metric ton by the midday break.
The contract has gained 2.18% so far this week. “If Indonesian export levy increased, it will be supportive for Malaysian palm oil export potential,” said Anilkumar Bagani, commodity research head at Mumbai-based brokerage Sunvin Group.
Indonesia will likely increase its palm oil export levy to support the country’s biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters, citing tightening funds.
Strength in rival edible oils and crude oil added support to the contract, he said.
Dalian’s most-active soyoil contract rose 0.25%, while its palm oil contract was up 0.42%. Soyoil prices on the Chicago Board of Trade gained 0.73%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Oil prices rose for a second day on Friday, set for their third weekly gain, on uncertainty about the future of supply from Venezuela and as Iranian unrest increases concerns about output there. Stronger crude oil prices make palm oil more attractive for biodiesel feedstock.
Palm oil is biased to retest support at 4,024 ringgit per metric ton, as it failed to break resistance at 4,074 ringgit, Reuters technical analyst Wang Tao said.
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