-- Palm oil futures in Malaysia edged higher on Friday, amid support from a weaker Ringgit and higher crude oil prices, which made biodiesel more attractive, alongside mounting El Nino risks and higher biodiesel blends.
After easing on Thursday, the Bursa Malaysia Derivatives' May crude palm oil contract was up by 0.22%, trading at 4,515 Malaysian ringgit ($1,139.29) per metric ton. The June contract was up by the same measure, at 0.22%, to 4,562 ringgit/mt.
Both contracts were up nearly 2% this week, reversing two straight weekly losses.
This decline on Friday, however, comes despite a weaker Ringgit, with the currency having lost 0.32% over the past week, and soaring crude oil prices, with Brent Crude futures touching $105.98, according to Trading Economics.
Besides this, the Malaysian Palm Oil Council said on Friday that it expects prices to remain above 4,500 Ringgit/mt in the near-term, which it attributed to potential El Nino risks, harming supplies, along with Malaysia's move towards higher biodiesel blend, towards B15 from the current B10, which the Council said could absorb an additional 1 to 1 and a half million tonnes of oil annually.
Similar biodiesel programs across Indonesia and Thailand, with both countries increasing their blends, are expected to further tighten the markets in the near-term, the Council said.
According to price reporting agency MySteel, with the situation in the Middle East unlikely to ease any time soon, and with crude oil prices having surged again, palm oil is being reinforced "as a biodiesel feedstock," keeping futures prices elevated.