KUALA LUMPUR: Malaysian palm oil futures rose for a second consecutive session on Friday, buoyed by stronger demand ahead of Ramadan and on a technical correction after sharp falls earlier this week.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 1 percent, reaching 2,530 ringgit ($575.26) a ton at the end of the trading day, after earlier hitting a one-week high of 2,535 ringgit.
Traded volumes stood at 56,109 lots of 25 tons each at the close of trade.
“We are seeing a bit of continued correction after yesterday’s rise. Demand to a certain extent is a supportive factor,” said a trader from Kuala Lumpur, however, adding that the market may not sustain these gains for long.
“Demand isn’t too robust and (future) production will be a factor… it will definitely increase stocks.”
Shipments from Malaysia came in weaker-than-expected between April 1 and April 20, according to cargo surveyor data. Intertek Testing Services showed a decline of 1 percent in exports compared with a month-ago period, while Societe Generale de Surveillance showed a 4.7 percent rise.
Production is also seen to be rising and pulling down palm prices in the coming months, as the lingering effects of a crop-damaging El Nino wear off.
Malaysian production rose for the full month of March, up 16.3 percent from February, marking its first monthly gain since September and in line with seasonal trends.
Palm oil may break a resistance at 2,507 ringgit and gain further to 2,542 ringgit, said a Reuters market analyst for commodities and energy technicals.
In related vegetable oils, soybean oil on the Chicago Board of Trade slipped as much as 0.1 percent, while the September soybean oil contract on the Dalian Commodity Exchange climbed up to 0.3 percent.
