Palm gains but logs second weekly decline on higher output, stocks

Malaysian palm oil futures ended higher on Friday, but clocked a second weekly loss as forecast of higher production and inventories weighed on sentiment.

The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange closed up 41 ringgit, or 1.07%, at 3,865 ringgit ($848.89) a metric ton.

For the week, the contract has declined 3.5%.

Malaysia’s palm oil inventories at end-July likely rose 4.2% from the month before to a five-month peak of 1.79 million metric tons, a Reuters survey showed on Friday.

Production was pegged to rise 9.2% to 1.58 million metric tons, while exports likely surged 8.5% to 1.27 million metric tons, the survey showed.

The Malaysian Palm Oil Board (MPOB) is scheduled to release its data on Aug. 10.

MPOB director-general Ahmad Parveez Ghulam Kadir said on Friday palm oil prices are forecast to trade in the range of 3,800-4,000 ringgit by the end of 2023.

Inventories at end-2023 is pegged at 2 million metric tons, lower than 2.19 million metric tons a year ago, MPOB said.

The United States would continue to do “whatever is necessary” to ensure Russia can freely export food if there was a revival of a deal allowing the safe Black Sea export of Ukrainian grain, U.S. Secretary of State Antony Blinken said on Thursday.

Dalian’s most-active soyoil contract DBYcv1 gained 0.5%, while its palm oil contract DCPcv1 lost 0.5%. Soyoil prices on the Chicago Board of Trade BOcv1 up 1.7%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Sonia Cheema and Shilpi Majumdar)