Palm oil ticks up for second day on higher demand hopes
Malaysian palm oil futures gained for a second straight session on Tuesday, underpinned by better demand prospects after India slashed import taxes, although gains were capped by higher supply outlook.
The benchmark palm oil contract FCPOc3 for November delivery on the Bursa Malaysia Derivatives Exchange closed up 20 ringgit, or 0.46%, at 4,338 ringgit ($1,042.79) a tonne.
The market is waiting for Sept. 1-15 export data by cargo surveyors due on Wednesday with hopes that it would sustain the strong momentum of a 29-57% monthly rise seen during Sept. 1-10.
Buying activity was due to a price adjustment between contracts as the September delivery contract expires on Wednesday, a Kuala-Lumpur based trader said.
“Any higher rally is (being) curtailed by rising stocks and better production,” he added.
Analysts see an uptick in stockpiles at the end of the month after the Malaysian Palm Oil Board last week reported a higher-than-expected 25% surge in end-August inventories and stronger production.
Top buyer India’s demand for Malaysian palm oil is likely to improve this month after rival Indonesia raised its export duties, but any upside to prices will be limited by erosions in external edible oil markets, Refinitiv Agriculture Research said in a note on Monday.
India has also cut the base import taxes on palm oil, soyoil and sunflower oil ahead of Diwali festival as the world’s biggest vegetable oil buyer tries to cool near-record price rises.
Refinitiv forecast the contract to rebound towards resistance levels at 4,360 ringgit-4,380 ringgit a tonne this week.
Dalian’s most-active soyoil contract DBYcv1 fell 0.5%, while its palm oil contract DCPcv1 rose 0.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.7%.
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 Sherry Jacob-Phillips, Uttaresh.V and Amy Caren Daniel)