Palm oil gains for the first time in three months

The price of Malaysian palm oils futures increased on Friday, posting their first monthly gain for three months. This was boosted by the strength in competing oils and expectations that India will increase its purchases.

The benchmark May palm oil contract on the Bursa Derivatives Exchange rose 42 ringgit or 0.93% to 4,553 Ringgit ($1,020.85) per metric ton.

"India... had a significantly lower level of imports in January and Februrary." "The stocks are falling and if import and processing margins continue, India may be covered for new coverage before Ramadan," Anilkumar bagani, commodity researcher at Mumbai-based brokerage Sunvin Group, said.

The contract increased by 5.18% in the month, despite its first weekly decline in six weeks. The contract dropped 3.28% in the last week.

Dalian's palm oil contract grew by 0.31%, but its most active soyoil contract jumped 1.06%. Chicago Board of Trade Soyoil Prices grew by 0.26%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

A trade ministry official announced on Friday that Indonesia will reduce its crude palm oil benchmark price in March to $954.50 a ton. However, the export tax will remain at $124 per ton.

According to an independent inspection company, exports of Malaysian products containing palm oil in February are estimated to have fallen between 8.5% and 11 %.

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Analysts told a Kuala Lumpur conference earlier this week that a recovery in palm oil output and lower imports from rate-sensitive consumers will drive prices down in the months to come, even though top producer Indonesia increases biodiesel use.

The price of palm oil could retest the support level at 4,476 Ringgit per metric tonne. A break below this mark would open the door to 4,411 to 4,453 ringgit. ($1 = 4.4600 ringgit)

(source: Reuters)