JAKARTA: Malaysian palm oil futures climbed for a second day on Friday, tracking gains in soyoil and crude oil prices, but the contract fell for a fifth straight month on concerns about oversupply and weakening demand.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange closed 2.27% higher at 3,418 ringgit ($737.43) per tonne.
It has lost 8.5% this week, hitting its lowest in over 1-1/2 years earlier this week after a leading analyst warned of an impending slump in prices amid global market turmoil.
The benchmark declined about 17.5% this month, its biggest monthly drop since June.
“Soybean oil and crude oil moved higher, so crude palm oil also (moved higher),” a Kuala Lumpur-based trader said.
Soyoil prices on the Chicago Board of Trade were little changed during Asia hours, after rising 2.75 overnight.
Dalian’s most-active soyoil contract rose 0.75%, while its palm oil contract gained 0.91%.
Palm hits lowest in over 1-1/2 years as recession fears dent demand
Oil prices were on track for their first weekly gain in five on Friday, underpinned by a weaker dollar and the possibility that OPEC+ will agree to cut crude output when it meets on Oct. 5.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market, while higher crude oil prices make palm more attractive for biofuel feedstock.
Exports of Malaysian palm oil products for September rose 9.7% compared to August, cargo surveyor Intertek Testing Services said, while independent inspection company AmSpec Agri Malaysia reported a 10.8% rise.
Meanwhile, Indonesia plans to set its crude palm oil reference price at $792.19 per tonne for the Oct. 1-15 period, a senior official said, which would place export tax for palm oil at $33 per tonne for the period
