Palm ends over 1% higher on stronger crude, rival oils
Malaysian palm oil futures reversed early losses on Monday, tracking sharp gains in rival oils and crude futures, but expectations of a buildup in August stockpile capped gains.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange closed 58 ringgit, or 1.36%, at 4,323 ringgit ($1,023.44) a tonne, after declining 2.4% earlier in the day.
Prices recovered on fresh fears about rising COVID-19 cases spreading from some estates to mills, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Sentiment were hit by the Southern Peninsula Palm Oil Millers’ Association’s estimates for production during Aug. 1-20 to rise 11.5% month-on-month, traders said.
“We expect an increase in production and decrease in exports, resulting in the addition of inventories at the end of August,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Cargo surveyors last week said palm oil shipments during Aug. 1-20 fell between 8.7% and 11.5% from the month before.
India, the world’s biggest vegetable oil importer, on Friday cut base import taxes on crude and refined soyoil and sunflower oil to 7.5% from 15% until Sept. 30.
This puts soft oil imports at parity with those of palm oil and may cap a recovery in palm oil prices, traders and analysts said.
India may restore higher duty structure for palm and soft oils after Sept. 30, hence exporters will seek to ship to India as much as possible before the deadline, Bagani said.
Oil prices jumped 3% with gains driven by a weaker dollar despite demand concerns stoked by rising cases of the Delta coronavirus variant, making palm a more attractive option for biodiesel feedstock. O/R
Dalian’s most-active soyoil contract DBYcv1 gained 0.3%, while its palm oil contract DCPcv1 rose 0.6%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 2.5%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Source: Reuters (Reporting by Mei Mei Chu; Editing by Subhranshu Sahu and Rashmi Aich)