KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, reversing earlier losses, but still booked a second consecutive weekly decline, as forecasts of rising production and inventory limited the gains.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange rose 14 ringgit, or 0.37%, to 3,815 ringgit ($888.45) a metric ton at the close.
The contract fell 1.7% this week.
Crude palm oil futures traded lower earlier in the session as concerns over rising output and stocks in the coming weeks weighed on market sentiment, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
A Reuters poll estimated that Malaysia’s palm oil inventories rose in April for the second consecutive month, as the industry approaches peak production season, with the second half of the year expected to bring in significant output hikes.
The Malaysian Palm Oil Board will release its monthly supply and demand data on May 13.
Palm falls on rival oils, market awaits for May production outlook
Dalian’s most active soyoil contract rose 0.44%, while its palm oil contract added 0.28%. Soyoil prices on the Chicago Board of Trade (CBOT) gained 0.5%.
Palm oil tracks the prices of rival edible oils as it competes for a share of the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.4% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices rose and are poised for a weekly gain as trade tensions between top oil consumers China and the United States showed signs of easing and Britain announced a “breakthrough” U.S. trade deal.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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