MUMBAI, 08 Nov (Commoditiescontrol): Malaysian crude palm oil (CPO) futures closed higher on Friday, marking the third consecutive week of gains, as insights from a major industry conference in Bali pointed to optimistic projections for palm oil production and pricing for the years 2024-2025.
This week, the benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange surged by 148 ringgit, or 2.99%, closing at 5,100 ringgit ($1,164.38) per metric ton. This gain reflects a notable increase of 4.77% over the week, the highest since June 20, 2022.
The futures market opened strong but encountered resistance when prices rose above the 5,000 ringgit mark. Despite this, prices remained well-supported, buoyed by a broader rally in vegetable oils, which indicates strong bullish sentiment, according to a trader at a global brokerage.
Year-to-date, Malaysian benchmark palm oil futures have increased by more than 35% and are projected to trade around 5,000 ringgit ($1,141) per metric ton until June 2025, driven by tight supply conditions and robust demand, as highlighted by industry analysts at the conference.
Furthermore, Indonesia's plans to increase the mandatory palm oil content in biodiesel from 35% to 40% next year are expected to necessitate an additional feedstock supply of approximately 3 million metric tons, according to a senior official from the Indonesian Palm Oil Association (GAPKI).
Global palm oil output is anticipated to rise by 2.3 million tons during the October 2024 to September 2025 season, recovering from a decline of 1.2 million tons in the current season, as noted by industry analyst Thomas Mielke.
In related markets, Dalian's most-active soyoil contract rose by 0.5%, while its palm oil contract increased by 2.46%. Soyoil prices on the Chicago Board of Trade also experienced a 0.7% uptick. The palm oil market closely follows price movements of rival edible oils, competing for a share in the global vegetable oils sector.
Additionally, the Malaysian ringgit strengthened by 0.45% against the U.S. dollar, making palm oil more expensive for foreign buyers. On the oil front, prices saw a slight decline as the perceived risk of a hurricane impacting U.S. oil and gas output diminished, while markets remain cautious about how President-elect Donald Trump’s policies may influence supply dynamics. Lower crude oil futures could render palm oil a less appealing option for biodiesel feedstock.
(By Commoditiescontrol Bureau; +91 98201 30172)
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