Malaysian palm oil futures rebounded on Friday and were on track for an 11% weekly jump, as a recent rally in rival edible oils and a declining ringgit lent support.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange gained 91 ringgit, or 2.1%, to 4,428 ringgit ($933.39) a tonne by the midday break, rising for a fourth session in five.
Palm continues its uptrend due to a wide spread against soy oil, the Ukraine crisis, biodiesel feasibility and anticipated floods in the palm growing regions, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
“To add to the usual volatility, Indonesian duty policies keep the market guessing what’s next,” he said.
Market participants now await fresh forecasts from leading industry analysts at the Indonesian Palm Oil Conference.
The ringgit MYR=, palm’s currency of trade, fell against the dollar and was trading around it lowest since 1998. A weaker ringgit usually makes the tropical oil cheaper for foreign buyers.
Meanwhile, Malaysia’s central bank delivered a fourth consecutive rate hike on Thursday as it sought to contain persistent inflation amid a positive growth outlook.
Dalian’s most-active soyoil contract DBYcv1 rose 1%, while its palm oil contract DCPcv1 gained 0.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.5%.
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 retest a resistance at 4,459 ringgit a tonne, a break above which could lead to a gain into 4,533-4,607 ringgit range, Reuters technical analyst Wang Tao said.
