Palm oil futures closes 2.71% higher on soyoil strength
Malaysian palm oil futures closed more than 2% higher onTuesday as trading resumed after a long holiday weekend, with gains in rival Dalian and Chicago soyoil prices supporting the market.
The benchmark palm oil contract FCPOc3 for January delivery on the Bursa Malaysia Derivatives Exchange climbed 103 ringgit, or 2.71%,to 3,905 ringgit ($828.03) a metric ton on the closing. Malaysia’s financial markets were shut onMonday for a public holiday.
“Trading resumed on Tuesday on a positive note, borrowing strength from CBOT (Chicago Board of Trade) soybean oil and Dalian palm olein,” a Kuala Lumpur-based trader said.
“Continued strength of rival oilseeds and short-covering activity at noon lifted price to midday highs.”
Soyoil prices on the CBOT BOcv1 climbed 1.67%.Dalian’s most-active soyoil contract DBYcv1 was up 1.48%, while its palm oil contract DCPcv1 increased 1.24%.
Soybean prices impact the cost of soyoil, which competes with palm oil for a share in the global vegetable oils market.
India’s imports of palm oil and sunflower oil in 2022/23 surged by 24% and 54%, respectively, to record highs on a rebound in consumption and as both oils were available at a steep discount compared to rival soyoil.
Higher purchases by India, the world’s biggest importer of vegetable oils, could help to lower palm oil stocks in Indonesia and Malaysia. The buying could reduce inventories in sunflower oil-producing Black Sea countries.
Malaysia is confident exports of its palm oil and related products to China willincrease further this year, Bernama state news agency reported on Tuesday, citing the plantations and commodities minister.
Malaysia’s palm oil stockpiles stood at a four-year high at the end of October despite more-than-expected exports, data from the Malaysian Palm Oil Board showed on Friday.
Cargo surveyor Societe Generale de Surveillance estimated exports of Malaysian palm oil products for Nov. 1-10 at 404,074 metric tons.
The Malaysian ringgit MYR=, palm’s currency of trade, strengthened 0.21% against the dollar on the closing. A weaker ringgit makes palm oil more attractive for foreign currency holders.
Source: Reuters (Reporting by Dewi Kurniawati; Editing by Subhranshu Sahu and Pooja Desai)