InfoSAWIT, KUALA LUMPUR – Malaysian palm oil futures climbed for the fifth consecutive session on Friday (Nov 29), driven by supply concerns as heavy rains exacerbated already weak production levels.

According to Reuters, the benchmark palm oil contract for February delivery (FCPOc3) on the Bursa Malaysia Derivatives Exchange gained 138 ringgit or 2.82%, closing at 5,023 ringgit per metric ton. For the week, the contract surged 8.21%, marking its largest weekly increase since June 2023, after experiencing two consecutive weeks of declines.

Heavy rainfall, particularly along the eastern coast and northern regions of Peninsular Malaysia, has worsened production conditions, noted Paramalingam Supramaniam, Director of Pelindung Bestari.

“Market sentiment remains fragile, and supply constraints will keep prices defensive,” he said.

Data from the Malaysian Palm Oil Board (MPOB) revealed a 6.32% drop in palm oil stocks in October, falling to 1.88 million tons. Meanwhile, crude palm oil production declined by 1.35% to 1.80 million tons.

Palm oil prices also tracked gains in other vegetable oils. The most active soyoil contract on the Dalian Commodity Exchange rose by 1.49%, while its palm oil counterpart increased by 3.05%.

On the other hand, global crude oil prices weakened by more than 3% over the week, with Brent Crude falling to $72.78 per barrel due to easing supply concerns following initial fears of a conflict between Israel and Hezbollah escalating.

The Malaysian ringgit strengthened by 0.09% against the US dollar, making palm oil more expensive for buyers using foreign currencies. (T2)