Malaysian palm oil futures rose for a fourth consecutive session on Friday to be on course for their best week in eight, as higher June exports and concerns over tightening global edible oil supplies underpinned prices.
The benchmark palm oil contract FCPOc3 for September delivery on the Bursa Malaysia Derivatives Exchange gained 25 ringgit, or 0.67%, to 3,735 ringgit ($897.62) a tonne by the midday break.
For the week so far, palm is up 6% and is headed for its second straight weekly gain.
“Solid rise in Malaysian June exports and a firm Dalian at Asia trading hours helped to extend palm oil futures rise this morning,” said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.
Exports of Malaysian palm oil products for June rose 10.8% to 1,546,014 tonnes from May, cargo surveyor Societe Generale de Surveillance said on Thursday.
Aiding sentiment was a bullish U.S Department of Agriculture report and India lifting restrictions on imports of refined palm oil.
But, risks of pressure on prices loom due to higher production.
“Moving into (the third quarter), the production growth from Peninsular Malaysia should kick in, which will drive inventory higher and pressure crude palm oil prices,” Adrian Kok, an equity analyst at Kenanga Investment Bank said in a note.
Top producer Indonesia will impose emergency measures until July 20 to contain an exponential spike in novel coronavirus cases that has strained its medical system.
U.S. farmers seeded the second-largest combined corn and soybean acreage ever this spring, the U.S. Agriculture Department said. However, this was below expectations and sparked a rally in futures prices.
Dalian’s most-active soyoil contract DBYcv1 rose 1.8%, while its palm oil contract DCPcv1 gained 2.2%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Uttaresh.V)