Palm Oil Futures Rise After Three Sessions of Declines

KUALA LUMPUR: Malaysian palm oil futures experienced a slight increase on Friday, recovering from a three-session downturn. The uptick was supported by gains in Chicago soyoil and crude oil prices. However, a stronger ringgit and sluggish demand from significant markets limited further upward movement.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange saw a rise of 0.41%, reaching 3,927 ringgit ($914.53) per metric ton by the midday break. Despite this, the contract has declined by 3.6% over the course of the week.

According to Anilkumar Bagani, head of commodity research at Sunvin Group, a Mumbai-based brokerage, crude palm oil futures trading resumed on a positive note following a holiday, spurred by a surge in Chicago soyoil and energy futures both overnight and during Asian trading hours.

Bagani noted that gains were constrained by a stronger ringgit and a lack of robust purchasing activity amid expectations of increasing Malaysian palm oil inventories for April. Soyoil prices on the Chicago Board of Trade increased by 0.7%.

The Dalian Commodity Exchange is closed for Labour Day holidays from May 1 to May 5. Palm oil prices often mirror the price trends of competing edible oils, as they vie for market share in the global vegetable oils sector.

Impact of Oil Prices and Currency Exchange

Oil prices advanced in early Asian trading following China’s announcement that it is open to discussions with the U.S., raising hopes for a reduction in trade tensions between the world’s two largest economies.

Elevated crude oil futures enhance palm oil’s attractiveness as a biodiesel feedstock.

The ringgit, the currency in which palm oil is traded, appreciated by 0.53% against the U.S. dollar. This makes the commodity more expensive for buyers using foreign currencies.