Palm oil prices rise on Dalian oil demand and stronger Dalian crudes

The price of Malaysian palm oils futures recovered from early losses, with the help of gains in Dalian edible oil, and traders are optimistic about a possible resumption in demand for palm oil from India.

At midday, the benchmark April palm oil contract on Bursa Derivatives Exchange rose 20 ringgit (0.46%) to 4,328 Ringgit ($977.64). The contract fell 1.35% on Monday.

Anilkumar bagani, head of commodity research at Mumbai's Sunvin Group, says that market participants are confident about India's resumption of palm oil purchases in order to replenish its stock after palm oil imports fell to multi-year lows last January.

Bagani added that "the broader positive trade of Chinese vegetable oils in Asian hours also played a role in some of the strength seen in crude oil futures."

Dalian's palm oil contract saw a 2.27% increase, while the most active soyoil contract grew by 2.74%. Chicago Board of Trade soyoil prices fell 0.17%.

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

Five dealers reported that India's palm-oil imports fell to their lowest level in 14 years in January as refiners substituted the cheaper soyoil with palm oil due to palm oil's negative margins.

By February 2, 2024-25 soybean imports from the European Union had reached 8.27 millions metric tons, compared to 7.32 million metric tons a year ago.

Data published by the European Commission revealed that EU palm oil imports fell to 1,69 million tonnes from 2,14 million tons a year ago.

The palm ringgit's currency has strengthened by 0.29% against U.S. dollars, increasing the price of the commodity for buyers who hold foreign currencies.

Technical analyst Wang Tao stated that palm oil could revisit its high of 4,415 Ringgit per metric tonne on Feb. 3, as it stabilized around the support level at 4,265 Ringgit.

(source: Reuters)