Palm oil to rise on slower Indonesian production
Malaysian palm futures increased on Friday due to concerns over slow growth in Indonesia, the top producer, but Malaysian exports were weak and capped gains.
By midday, the benchmark palm oil contract on Bursa Derivatives exchange for November delivery was up 15 Ringgit or 0.41% at $3,711 ringgit (US$836.75) per metric ton.
After a three-week decline, the stock has so far gained 0.19% for the week.
Lingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that palm prices have become a little more expensive than soybean oil. This has led to concerns about demand.
He said that prices would move in a range, and be resilient because Indonesia's production for August is not as high as many had expected.
Data from AmSpec Agri Malaysia, an independent inspection company, showed that exports of palm oil products from Malaysia for the period August 1-15 decreased by 22.3% compared to the previous month.
Intertek Testing Services, a cargo surveyor, said that exports dropped by 20.2% in the same time period.
According to the data of the two companies, the pace of exports was lower than the decline of 12.2%-17.7% from Aug. 1-10.
Dalian's palm oil contract, which is the most active contract, grew by 0.8%. The Chicago Board of Trade soyoil price fell 0.75% for the fifth day in a row.
As they compete to gain a share of the global vegetable oil market, palm oil is affected as well by changes in prices in other oils.
The Malaysian Ringgit, the palm oil's trade currency, dropped 0.38% against dollar. Palm oil becomes more appealing to foreign currency holders when the ringgit is weaker. $1 = 4.4350 Ringgit (Reporting and editing by Sonia Cheema, Janane Venkatraman).
(source: Reuters)
