Commodities

VEGOILS-Palm jumps 5%, eyes biggest weekly gain in two decades on supply concerns

Credit: REUTERS/STRINGER

Malaysian palm oil futures jumped 5% on Friday, climbing to their highest level since 2008 and recording their biggest weekly gain since 2001, underpinned by growing concerns over global supplies.

By Chen Lin

SINGAPORE, May 7 (Reuters) - Malaysian palm oil futures jumped 5% on Friday, climbing to their highest level since 2008 and recording their biggest weekly gain since 2001, underpinned by growing concerns over global supplies.

The benchmark palm oil contract for July delivery FCPOc3 on the Bursa Malaysia Derivatives Exchange last traded up 210 ringgit, or 5% ringgit, at 4,425 ringgit ($1,076.64) a tonne. The third-month contract hit its highest since March 2008 at 4,434 rinngit a tonne.

"Palm prices are high now fuelled by a second day of triple digit gains on Dalian and higher soybean oil close on CBOT but palm fundamentals remain the same," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics. "Some cash prices moved a notch higher, noticeably palm olein spot was up $35 from yesterday's last prices."

The futures contract was set for a 14.4% rise for the week, its biggest since 2001.

The contract for spot-month May delivery was trading at a record high of 4,885 ringgit a tonne.

Palm oil is being supported by a rally in the global agricultural market led by Chicago corn and soybean futures, which are trading at multi-year highs.

"CPO futures opened gap higher on second straight day following persistently bullish momentum in global soybean oil and rapeseed oil markets, renewed palm oil buying from China and a strong undercurrent in Chinse RBD palm olein, soyoil and rapeseed oil futures, creating more hedge opportunities which could attract fresh buying," edible oil brokerage Sunvin said in a note.

China's soybean imports in April rose 11% from the same month a year earlier, boosted by the arrival of some delayed Brazilian cargoes, customs data showed on Friday.

China, the world's top importer of soybeans, brought in 7.45 million tonnes of the oilseed in April, up from 6.714 million tonnes a year earlier, according to General Administration of Customs data.

Dalian's most-active soyoil contract DBYcv1 rose 1.9%, and its palm oil contract DCPcv1 gained 2.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 1.5%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

($1 = 4.1100 ringgit)

phttps://tmsnrt.rs/3uqOQr9

(Reporting by Chen Lin; Editing by Subhranshu Sahu, Vinay Dwivedi and Amy Caren Daniel)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Commodities Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More