Palm oil closes at its highest level since mid-June 2022
Malaysian palm futures closed on Monday after new buying interest emerged and short coverings were covered.
The benchmark palm-oil contract for January delivery at the Bursa Derivatives exchange gained 94 Ringgit or 1.84%, to 5,195 Ringgit ($1,178.81), the highest price since mid-June 2022.
A Kuala Lumpur-based broker said that the price started to rally after the futures reached 5,100 ringgit. This was due to the emergence of new purchasing interest and the covering of short positions. The futures then rose to a new record of 5,200 ringgit.
The benchmark palm oil futures in Malaysia have increased by more than 35% so far this year. They are expected to continue to rise to around 5,000 Ringgit ($1,141.50) per metric tonne until June 2025. This is due to tight supply and strong demand.
Malaysian Palm Oil Board's (MPOB) data for October showed that the palm oil stock shrank by the most since seven months as exports surged and production decreased.
Intertek Testing Services, a cargo surveyor, reported on Monday that exports of Malaysian products containing palm oil for the period Nov. 1-10 were down 15.8%, to 429.455 metric tonnes, compared with a previous month.
AmSpec Agri Malaysia, an independent inspection company, said that exports of Malaysian products containing palm oil for the period Nov. 1-10 decreased 14.6%, from 490 582 tonnes to 419 094 tonnes, compared with 490 582 tonnes exported during Oct. 1-10.
Dalian's palm oil contract, which is the most active contract in Dalian, gained 2.16% while soyoil prices fell by 0.47%. Chicago Board of Trade soyoil prices were up by 0.37%.
As palm oil competes to gain a share of the global vegetable oils industry, it tracks price changes in rival edible oils.
The palm oil price dropped by 0.62% when the ringgit, the currency used for trade in the palm industry, was weakened against the U.S. Dollar.
The oil prices were not much different on Monday, as the risk of disruptions in supply from a storm in the United States has diminished and investors disappointed by China's stimulus program. Investors had been looking for fuel demand growth to be fueled by the world's second largest oil consumer. Oil prices were little changed on Monday as the threat of supply disruptions from a U.S. storm eased and after China's stimulus plan disappointed investors seeking fuel demand growth in the world's No.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
(source: Reuters)
