Palm closes over 3% higher due to stronger rival oils and output concerns
Malaysian palm futures closed more than 3% higher Wednesday. Prices were boosted by the stronger edible oils of rivals and concerns about production. Increased buying in anticipation of an industry conference was also supportive.
The benchmark May palm oil contract on the Bursa Derivatives Market gained 169 Ringgit or 3.75%. It closed at 4,673 Ringgit ($1,052.95) per metric ton after hitting an intraday peak of 4,695 Ringgit. The contract dropped 0.84% during the previous session.
Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that the palm oil market has a positive trajectory, in sync with the growth in Dalian and Chicago.
He said that the good interest in buying was likely due to position covering before next week's Global Edible Oils Industry Conference and concern about weather impacting production in East Malaysia.
The Malaysian Meteorological Department stated in its forecast of February 16 that a monsoon will affect the country between February 21-25, with heavy rains continuing to fall throughout East Malaysia and eastern states on Peninsular Malaysia.
Dalian's palm oil contract, which is the most active contract, grew by 1.68%. Chicago Board of Trade Soyoil gained 1.63%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Oil prices rose amid concerns about disruptions to oil supplies in the U.S., Russia and the markets as they awaited clarification on the Ukraine peace negotiations.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
By February 16, the European Union's soybean and palm oil imports, which began in 2024-25, totaled 8.62 million tonnes, up 11% on last year, whereas imports of soybeans fell 21%.
The palm ringgit's trade currency strengthened by 0.11% to the U.S. Dollar, increasing the price of the commodity for foreign buyers. ($1 = 4.4380 ringgit)
(source: Reuters)
