Palm oil climbs as rival oils firmer and output concerns increase.
Malaysian palm futures prices rose on Wednesday due to stronger edible oils from rival producers and concerns about production. Increased buying in anticipation of an industry conference was also supportive.
At midday, the benchmark May palm oil contract on Bursa Derivatives Exchange rose 82 ringgit or 1.82% to 4,586 Ringgit ($1,032.65) per metric ton. The contract dropped 0.84% on Monday.
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 1.35%. Chicago Board of Trade Soyoil gained 0.13%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Oil prices rose amid disruptions to supply in the U.S., Russia and markets were awaiting clarity about 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 exports for 2024-25, which began in early July, had reached 8,62 million tonnes, up 11% on last year, while palm oil exports fell 21%.
The palm ringgit's currency has strengthened by 0.02% in relation to the U.S. Dollar, making it slightly more expensive for foreign buyers.
Technical analyst Wang Tao stated that palm oil could rise to 4,633 Ringgit per ton as its upward trend from 4,106 Ringgit may have resumed.
(source: Reuters)
