Lang
Malaysian palm oil futures closed higher on Friday, recording a third consecutive week of gains.
The market was supported by a weaker ringgit, expected demand during Ramadan, and seasonal production declines.
The benchmark palm oil contract for April delivery on Bursa Malaysia Derivatives rose by RM102, or 2.32%, to close at RM4,505, equivalent to $1,015.33, per metric tonne.
This marked the third consecutive daily gain.
The contract gained 5.04% for the week.
Darren Lim, commodities strategist at Singapore-based brokerage Phillip Nova, said palm oil futures rose strongly, driven by firm performance in related vegetable oil markets, particularly Dalian.
He added that the weaker Malaysian ringgit made exports more competitive.
Lim said market sentiment was also supported by expectations of higher demand ahead of Ramadan, as seasonal events typically lift consumption and restocking of palm oil.
He added that expectations of lower production due to historical seasonal factors also supported optimism and further gains in palm oil prices.
The most-active soybean oil contract on Dalian rose by 3.25%, while the palm oil contract added 2.94%.
Soybean oil prices on the Chicago Board of Trade fell by 0.04%.
Palm oil tracks price movements in rival vegetable oils because it competes for share in the global vegetable oils market.
The Malaysian Palm Oil Board is expected to release monthly supply and demand data on February 10.
Crude oil prices rose after new sanctions on Iranian crude exports, but remained on track for a third weekly decline amid renewed trade tensions.
Stronger crude oil futures make palm oil more attractive as a feedstock for biodiesel production.
The ringgit, the currency used for palm oil trade, fell by 0.32% against the US dollar, making the commodity cheaper for buyers holding foreign currencies.