Palm rises on lower production, logs fourth weekly gain

Malaysian palm oil futures ended higher on Friday and logged a fourth straight weekly gain, as lower stocks supported the market despite demand concerns and uncertainties surrounding Indonesia’s biodiesel mandate.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 41 ringgit, or 0.9%, to 4,595 ringgit ($1,036.78) a metric ton at the close. The contract rose 2.02% this week.

The market adjusted slightly on demand concerns though lower end stocks kept prices supported, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

“Uncertainties surrounding Indonesia’s biodiesel mandate is also keeping trading cautious.”

Indonesia expects its B40 biodiesel programme, aimed at reducing its reliance on imported diesel fuel, will reach full implementation next month after delays at the start of the year, energy ministry official Eniya Listiani Dewi said.

Dalian’s most-active soyoil contract rose 0.13%, while its palm oil contract climbed 0.38%. Soyoil prices on the Chicago Board of Trade were up 0.93%.

Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.

Cargo surveyors are expected to release their estimates on Malaysian palm oil exports for February 1-15 on Saturday.

Oil prices rose and were poised to end three weeks of decline, buoyed by rising fuel demand and expectations that U.S. plans for global reciprocal tariffs would not come into effect until April, giving more time to avoid a trade war.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

The ringgit, palm’s currency of trade, strengthened 0.47% against the dollar, making the commodity more expensive for buyers holding foreign currencies.

More than 60% of Argentina’s soy crop is in average-to-excellent condition after recent rains refreshed the fields, which had been battered by hot, dry weather, the Buenos Aires Grain Exchange said on Thursday.

Tags: Malaysia, palm oil, futures, benchmark contract, soyoil