Palm oil was poised for a second straight weekly advance, supported by expectations of stronger demand from India and a renewed rise in crude oil prices.
Bloomberg reported that the benchmark futures traded near RM4,590 a tonne in Kuala Lumpur, up about 1% for the week despite being little changed from the previous session.
Kaleesuwari Intercontinental Ltd head of trading and hedging strategies Gnanasekar Thiagarajan said buying ahead of India’s festival season and concerns over El Niño were underpinning prices.
India’s edible oil consumption typically rises from August before peaking around Deepawali in November.
The country’s oilseed-planted area in early July was about 20% lower than a year earlier, raising the prospect of weaker domestic output and greater reliance on imported edible oils.
Palm oil also drew support from higher crude prices following renewed hostilities between the US and Iran, which improved the appeal of biofuels.
The tropical oil, a major biofuel feedstock, was trading at a discount of about US$53, or RM216.30, a tonne to gasoil.
However, analysts said ample production and stockpiles in Indonesia and Malaysia could support exports while keeping palm oil prices range-bound.
