Palm climbs up stronger Dalian palm

The price of Dalian palm oil, which is the main source of palm oil in Malaysia, has been rising steadily, and this helped to support the market on Wednesday.

By midday, the benchmark May palm oil contract on Bursa Derivatives Exchange had gained 22 ringgit (0.49%) to 4,510 Ringgit ($1,018.06) per metric ton. The contract dropped 2.96% over the last two sessions.

A Kuala Lumpur based trader stated that the recovery in Dalian palm oil is supporting the crude palm oils prices. The spot month contract for March has held firm and provided additional price support.

Dalian's palm oil contract, which is the most active contract, gained 0.83% while soyoil fell by 0.81%. Chicago Board of Trade soyoil rose by 0.24%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks movements of competing edible oils.

The oil prices rose, helped by the weaker dollar. However, mounting concerns about a U.S. slowdown, and the impact tariffs will have on global growth, capped gains.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

Palm's currency, the ringgit (the palm-traded currency), fell 0.45% in value against the U.S. Dollar, making the commodity more affordable for buyers with foreign currencies.

Solvent Extractors' Association of India reported that India's imports of palm oil in February increased by 35.7% month-on-month, to 373 549 metric tonnes.

The stagnant production of cooking oils and the biodiesel drive in Indonesia, the top producer of palm oil, could cause prices to rise for many years. This is because they are increasing the cost of cheap palm oil.

Technical analyst Wang Tao stated that palm oil is still aiming for 4,360 ringgits per metric tonne, as indicated by a rising tendencyline. ($1 = 4.4300 ringgit)

(source: Reuters)