Palm oil post first weekly gain in three weeks
KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday and posted their first weekly gain in three weeks, as forecasts of a price recovery in the coming months at a key industry conference boosted sentiment. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.5%, to 4,462 ringgit ($1,093.09) a metric ton at the close.…
Malaysian palm oil futures closed at a higher level on Friday, marking their first weekly increase in three weeks. The benchmark January delivery contract on the Bursa Malaysia Derivatives Exchange rose 0.5%, reaching 4,462 ringgit ($1,093.09) per metric ton. Analysts at the Indonesian Palm Oil Conference anticipate a price rebound for palm oil in the months ahead, with the effects of El Niño-induced drought in Indonesia's production set to become apparent in the first quarter of 2027.
However, optimism was dampened by uncertainty over a potential new service fee by Danantara Sumberdaya Indonesia, leaving market participants awaiting further details on its possible impact. Palm oil prices are influenced by those of other edible oils, as it competes for market share. The Malaysian ringgit, used for trading, weakened by 0.22% against the dollar, making the commodity slightly more affordable for buyers holding foreign currencies.
Despite a slight increase in oil prices, they are expected to decline for a second week as US sanctions and economic pressure on Iran lessen concerns of renewed Middle Eastern conflict, while shipping attacks pose a persistent supply risk. The allure of palm oil as a biodiesel feedstock has also been diminished by lower crude oil futures.
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