Malaysian palm oil futures jumped more than 2% on Friday and were set for a fifth consecutive weekly gain, buoyed by strong demand from top buyer India amid concerns over tight production.
The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 98 ringgit, or 2.38%, to 4,219 ringgit ($999.29) a tonne by the midday break.
Palm has risen nearly 2% so far this week and is on course for its longest weekly gaining streak since mid-June 2020.
“We have seen the Indian palm demand more focused on Indonesia recently on higher supply levels and improved discounts,” said Marcello Cultrera, institutional sales manager and broker at Phillip Futures in Kuala Lumpur.
Indonesia crude palm oil prices, which were two weeks ago at levels similar to those in Malaysia, are now at a $30 discount, Cultrera said, adding production in the world’s largest producer was also improving.
A labour shortage and coronavirus restrictions are clouding the palm oil production outlook in no. 2 producer Malaysia, dimming hopes of a large rise in output in the seasonal peak months during the third quarter of the year.
Dalian’s most-active soyoil contract DBYcv1 fell 0.3%, while its palm oil contract DCPcv1 slipped 0.8%. Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.4%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may fall to 4,009 ringgit per tonne, as it failed a few times to break a resistance at 4,164 ringgit, Reuters technical analyst Wang Tao said.
Source: Reuters (Reporting by Mei Mei Chu; editing by Vinay Dwivedi and Subhranshu Sahu)