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VEGOILS-Palm oil rallies for third session, set for weekly gain on rivals' strength

Malaysian palm oil futures increased for a 3rd straight session on Friday and the market was set for a weekly gain, buoyed by strength in rival edible oils, though weaker petroleum prices, a firmer ringgit and demand concerns capped the increase.

The benchmark palm oil contract for December shipment on the Bursa Malaysia Derivatives Exchange acquired 42 ringgit, or 1.08%, to 3,918 ringgit ($ 937.32) a metric ton by the midday break.

The contract has actually gotten about 2.7% this week.

The recent strength in Malaysian palm oil futures indicates they have traded at a premium versus other oils such as Northwest Europe sunflower oil and U.S. soybean oil, Maybank Research study analyst Ong Chee Ting said in a note.

Nevertheless, the existing high crude palm oil price is unsustainable as a larger discount versus other significant oils is needed to sustain demand, especially if the market's peak output has actually been pushed back to Q4.

Dalian's most-active soyoil contract increased 0.46%,. while its palm oil agreement added 1.24%. Soyoil rates. on the Chicago Board of Trade were up 0.05%.

Palm oil tracks cost movements of rival edible oils, as. they compete for a share of the international vegetable oils market.

Oil costs, which were little altered in early Asian trade,. were on track to end greater for a 2nd straight week,. following a big cut in U.S. rate of interest and declining. global stockpiles.

Brent futures were trading 0.36% lower at $74.61 a. barrel at 0530 GMT. Weaker petroleum futures make palm a less. appealing choice for biodiesel feedstock.

The ringgit, palm's currency of trade, reinforced. 0.59% versus the dollar, making the product more costly. for purchasers holding foreign currencies and capping its gains.

Indonesia, the world's most significant palm oil exporter, will. present a new set of month-to-month levies in a bid to improve. competitiveness versus competing edible oils, a policy. published on Thursday by its financing ministry showed.

Indonesia's palm oil exports are anticipated to decrease this. year due to increased domestic intake because of a higher. biodiesel mixing mandate and a slight decrease in production,. an industry authorities informed Reuters on Thursday.

Palm oil may fall under a variety of 3,817 ringgit to 3,853. ringgit per ton, following its failure to break resistance at. 3,962 ringgit and a falling trendline, Reuters technical expert. Wang Tao said.

(source: Reuters)