Palm oil prices rise by more than 2 percent after Malaysian data on palm oil
Malaysian palm futures rose on Monday for the fourth consecutive session, after data released by the industry regulator revealed a drop in stocks. Expectations of improved demand also added to the bullish market sentiment.
The benchmark contract for palm oil delivery in April on the Bursa Derivatives Exchange rose 91 ringgit or 2.02% to 4,595 Ringgit ($1,028.65).
The Malaysian Palm Oil Board's (MPOB) data showed that Malaysian palm oil stocks dropped more than expected to the lowest level since 21 months in January, despite a drop in exports and an increase in imports, owing to a fall in production.
Stock figures released by MPOB were bullish. If demand increases in February and march, this will put pressure on end stocks. This is according to Paramalingam Supramaniam of Selangor brokerage Pelindung Bestari.
The palm price will be determined by the production patterns of the future. The rains in East Malaysia were also not helpful, so prices will remain defensive," said he.
Dalian's palm oil contract grew by 1.87%, while the most active soyoil contract climbed 0.15%. Chicago Board of Trade soyoil prices fell 0.2%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
Intertek Testing Services, a cargo surveyor, estimated that the exports of palm oil products from Malaysia between February 1-10 dropped by 3.9%. AmSpec Agri Malaysia however reported an increase of 6.4% compared to the same period last month.
Oil prices rose, rebounding from last week's declines, amid concerns of a global trade conflict. Investors appeared to dismiss the latest threat by U.S. president Donald Trump, this time regarding steel and aluminum imports.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency has weakened by 0.68% compared to the U.S. Dollar, making it cheaper for foreign buyers. ($1 = 4.4670 ringgit)
(source: Reuters)
