Palm up on Indonesian reference price increase in October
After two sessions of declining prices, Malaysian palm futures rose Tuesday as Indonesia's plans to raise its October reference price helped boost sentiment.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery had gained 43 ringgit or 1.08% to 4,038 Ringgit ($969.74).
The contract dropped 3.71% in the last two sessions.
Marcello Cultrera is a grains oilseeds softs broker with SSY Global. He said that the move by Indonesia to increase the crude palm oil reference price to $893.64 a ton in October has supported the Bursa Malaysia derivatives palm oil market. The market traded 50 points higher today morning.
This adjustment also reduced the Indonesian Palm Discount, which was from $59.5 down to $28.5 yesterday.
Farid Amir, a trade ministry official, said that Indonesia will increase its CPO Reference Price for October from $839.53 per ton in September to $893.64. Farid Amir, a trade ministry official, said that Indonesia will raise its CPO reference price for October to $893.64 per ton from $839.53 in September.
The palm ringgit's trade currency, the dollar, fell by 1.04%, lowering the price of the commodity for buyers who hold foreign currencies.
Chicago Board of Trade soyoil fell by 0.74%. Dalian's markets for vegetable oil were closed during China's Golden Week.
As rival edible oils compete to gain a share in the global vegetable oil market, palm oil monitors price changes.
Exports of palm oil products from Malaysia rose by 0.8% and 1,1% respectively in September, according to cargo surveyors ITS & AmSpec Agri.
The oil price was little changed, as stronger supply prospects outweighed concerns that tensions in the Middle East would impact the region's exports.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Technical analyst Wang Tao stated that palm oil could stabilize at support of 3,981 Ringgit and rebound to 4,067 Ringgit per metric tonne.
(source: Reuters)
