Malaysian palm oil futures topped December 2024 highs on Friday, tracking overnight gains in rival soybean oil despite weak export data.
The Bursa Malaysia Derivatives' September crude palm oil contract rose for a fifth consecutive session by a further 0.65% to 4,765 Malaysian ringgit ($1,170.47) per metric ton. The contract reached a new contract high and was set for a strong weekly gain of 4.1%.
The October contract firmed by a further 0.82% to reach a new contract high of 4,912 ringgit/mt. It was on track for a 4.3% weekly rise.
Prices rose despite cargo surveyor estimates reportedly showing a 5.5% to 13.2% month-over-month decline in Malaysian shipments for the Aug. 1-20 period. The latest trend reverses export growth recorded in June and July, raising concerns about near-term demand.
Competitiveness of Malaysian exports has dampened over the week as the local currency firmed against the US dollar by about 1%, making cargoes more expensive for international buyers.
Nonetheless, Chinese purchases this week and a potential demand shift from sunflower oil to other edible oils amid Black Sea disruptions provided some upside, Sunvin commodity research head Anilkumar Bagani told Bernama.
Future demand could be negatively impacted by a narrowing discount of palm oil to soybean oil, which would likely affect demand in price-sensitive countries, such as India. The country's soybean oil imports are reportedly expected to reach 620,000 metric tons this month, up 46% from the current marketing year's monthly average.
Meanwhile, prospects of lower supply due to Indonesia's B50 biofuel policy and the El Nino weather phenomenon will continue to support prices going forward.
In September, crude palm oil futures are expected to remain firm above 4,600 ringgit/mt, the Malaysian Palm Oil Council said.
Prices could also find support above 4,900 ringgit/mt and resistance at 5,050 ringgit/mt, according to Iceberg X trader David Ng, as cited by Bernama.