Palm oil prices rise on the strength of rival oils, and a possible increase in export taxes.

The price of Malaysian palm oils futures rose on Monday due to stronger oil prices and the expectation that Indonesia may raise its palm oil export taxes in December.

The benchmark contract for palm oil delivery in February on the Bursa Derivatives exchange gained 90 ringgit or 1.94% to 4,732 Ringgit ($1,062.89) per metric ton at the midday break.

Anilkumar bagani, Sunvin Group's research head, says that the Malaysian palm oil futures have opened higher after recovering rival oils in Asian trading hours.

He said that the almost certain rise in Indonesian palm oil export taxes in December 2024 had also increased the chance of a rebound in Malaysian palm futures.

Bagani predicted that Indonesia's palm-oil reference price would increase to $1073.56 a ton in December.

The crude palm oil price reference for Indonesia in November has been set at $961.97 a ton, and the export tax is $124 a ton.

Dalian's top-active palm oil contract increased 0.6%, while the soyoil contract dropped 0.12%. Chicago Board of Trade soyoil prices were up by 0.79%.

As rival edible oils compete to gain a share of global vegetable oil market, palm oil monitors the price movement of their competitors.

Oil prices fell after a 6% gain last week but were still near their two-week highs, as tensions between the West and Iran and Russia, major oil producers, grew, increasing the risk of a supply disruption.

Brent crude futures were down 0.51% to $74.80 per barrel at 0457 GMT. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.

The palm ringgit's trade currency strengthened by 0.29% versus the dollar. This made the commodity more costly for buyers who hold foreign currencies.

Later in the day, cargo surveyors will release their export data from Nov. 1-25.

Technical analyst Wang Tao stated that palm oil could test support at 4,595 Ringgit per metric tonne, with a high probability of breaking below this level and falling to 4,510 ringgit.

(source: Reuters)