Palm rises on supply concern, strong demand; set to post weekly gain

Malaysian palm oil futures climbed for a third straight session on Friday to their highest in nearly three weeks as expectations of weak output in August and improving demand underpinned the contract.

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange gained 43 ringgit, or 1.12%, to 3,869 ringgit ($884.95) a metric ton at closing.

The contract gained 5.1% for the week, its biggest weekly gain since mid-June 2023.

“Preliminary Aug. 1-20 production figures by the Malaysian Palm Oil Association are not so encouraging; we are not seeing a double-digit growth in production,” said Paramalingam Supramaniam, a director at Selangor-based broker Pelindung Bestari.

Indonesia’s plan to raise the biodiesel blend to 40% in January from the current 35% and improving demand from major buyers China and India are also supporting the price, he added.

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