Palm Oil Prices Rise Despite Weak Demand Drivers

Malaysia's palm oil prices rose on Friday due to firmer soyoil prices and concerns about medium-term supply. The November crude palm oil (CPO) contract on Bursa Malaysia increased by 0.89% to 4,859 ringgit a metric ton at the midday break.

This modest up-day could not offset the weekly decline, however, which is set to break a three-week winning streak with a 3.41% drop. Two demand drivers weakened simultaneously: cheaper crude oil reducing biodiesel demand and a stronger ringgit making exports more expensive for foreign buyers.

Kuala Lumpur-based trader David Ng pointed out that despite the up-day, there is still a near-term ceiling around 4,950 ringgit, even with support above 4,800. Palm oil's movement is often tied to energy markets and currencies, making it vulnerable to changes in these factors.