Palm oil prices ended higher on Friday

Palm oil prices closed higher, supported by more optimistic export forecasts, according to David Ng, a trader at Iceberg X in Kuala Lumpur. However, Ng believes that falling oil prices could negatively impact palm oil prices. He forecasts palm oil prices to remain above 4,500 ringgit per tonne, with resistance at 4,700 ringgit per tonne.

Malaysian palm oil futures declined for the week, weighed down by the continued decline in oil prices and profit-taking amid weak export demand.

The benchmark FCPO3 palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange fell 1.72% for the week. By the close of trading on Friday, it had risen 9 ringgit, or 0.2%, to 4,566 ringgit (US$1,117.47) per metric ton.

The most actively traded soybean oil contract in Dalian rose 1.15% on the day, while the palm oil contract rose 1.83%. Soybean oil prices on the Chicago Mercantile Exchange fell 1.04%.

Palm oil prices follow the price movements of competing edible oils as it fights for share in the global vegetable oil market.

Oil prices fell more than 3% on Friday and are expected to post significant weekly losses amid easing supply concerns as more stranded oil tankers leave the Strait of Hormuz, despite a collision with a cargo ship off the coast of Oman on Thursday.

Lower oil prices are making palm oil a less attractive feedstock option for biodiesel production.

“The lack of new demand, lower energy prices, falling soybean oil futures, and uncertainty over the B50 distribution have triggered profit-taking in palm oil futures,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil brokerage Sunvin Group.

Indonesia has issued a regulation mandating the use of B50 biodiesel fuel from July 1, with a three-month transition period for retailers to clear existing stocks, a senior energy ministry official said Thursday.

In the final leg of a week-long decline, Malaysian palm oil exports rose 11.1% between June 1 and 25, according to independent inspection company AmSpec Agri Malaysia, while cargo testing company Intertek Testing Services reported a 10.6% increase.

Tags: prices, palm oil