KUALA LUMPUR, Nov 29: Malaysian palm oil futures ended lower on Friday as investors booked profits from gains made earlier in the week, but prices were supported by optimism that higher biofuel mandates will stoke edible oil demand and prop up the tropical oil.
Market players had expected industry officials and leading vegetable oil analysts to deliver a bullish palm oil outlook at an industry meeting in Indonesia, and participated in a bout of position squaring on Thursday, although overall trade volumes were low throughout the week. By Friday’s close, the benchmark February contract on the Bursa Malaysia Derivatives Exchange had edged down 0.1per cent to 2,653 ringgit ($824) per tonne.
Total traded volume stood at 32,703 lots of 25 tonnes, a little lower compared to the usual 35,000 lots as traders rushed to take profits. Palm oil could benefit from biodiesel policies in top producers Indonesia and Malaysia as more of the tropical oil is snapped up to produce the “greener” fuel.
Technicals showed a bullish target at 2,692 ringgit per tonne for Malaysian palm oil, as a correction from a Nov 22 high has been completed, Reuters market analyst Wang Tao said. —Reuters