Palm rises on stronger crude oil, poised for first weekly gain in four

Malaysian palm oil futures rose for a third straight session on Friday, underpinned by stronger crude oil prices and a softer ringgit, and were on track for their first weekly gain in four.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange gained 14 ringgit, or 0.31 per cent, to 4,460 ringgit (US$1,059.38) a metric ton in early trade. The contract has risen 1.36 per cent so far this week.

Soyoil prices on the Chicago Board of Trade were up 0.04 per cent. The Dalian Commodity Exchange is closed from October 1 to 8 for holidays.

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

Oil prices rose slightly after four straight sessions of declines but were on track for their steepest weekly decline since late June due to market expectations that the OPEC+ group could hike output further despite oversupply concerns.

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

The ringgit, palm’s currency of trade, weakened 0.19 per cent against the dollar, making the commodity cheaper for buyers holding foreign currencies.

Indonesia’s state palm oil company Agrinas Palma Nusantara plans to develop a biofuel production complex in the Papua region, aiming to produce biodiesel entirely from palm oil, a company director said in an interview with CNBC Indonesia.

The Indonesian trade ministry urged the European Union to adopt the World Trade Organization’s panel ruling to remove countervailing duties on Indonesian biodiesel imports and regretted the block’s move to appeal the WTO ruling.

Asian stocks were poised for solid weekly gains on Friday as rising odds of the Federal Reserve cutting rates in the near-term helped cushion jitters around a US government shutdown that have pushed gold to record highs and weighed on the dollar.

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