Palm oil is gaining on rival oils, but caution prevails in the face of US tariffs
Malaysian palm futures rose on Thursday as they tracked the movement of rival oils in Dalian and Chicago, but caution about U.S. Tariffs limited gains.
By midday, the benchmark contract for palm oil delivery in May on the Bursa Derivatives Market had risen by 2 ringgit or 0.05% to 4,419 Ringgit ($998.42).
Anilkumar bagani, research head at Mumbai-based Sunvin Group, says that the market remains cautious due to confusion regarding U.S. Tariffs on Mexico and Canada.
The direction of the soy oil, rapeseed, and canola futures are also unclear from North American and European markets. However, Chinese futures have been seen trading slightly higher this morning."
China has retaliated to the new U.S. import tariffs that were imposed on February 2, raising import duties covering 21 billion dollars worth of American agricultural products and food, and moving both economies closer to a full-blown trade war.
The Chicago Board of Trade's (CBOT), soyoil prices rose by 1.09%. Dalian's most active soyoil contract, however, gained 0.71%. Palm oil prices rose 0.77%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks price changes of competing edible oils.
A survey revealed that Malaysia's palm oil stocks in February fell to their lowest level in almost three years due to production disruptions brought on by flooding.
Estimates from dealers show that India's imports of palm oil rose 36% month-on-month in February, after dropping to their lowest level since March 2011, in January.
The price of oil was stable on Monday after it had fallen in the previous four sessions. Although U.S. duties on Canadian crude may be reduced, investors are still wary about the remaining tariffs against Mexico and the plans by major producers to increase production.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are more stable.
The palm ringgit's trade currency, the U.S. Dollar, has risen by 0.02%, making it a bit more expensive for foreign buyers.
Palm oil
(source: Reuters)
