Palm oil rises as Chicago soyoil and crude oil strengthen
Malaysian palm futures rose Monday for the fifth session in a row, boosted by a stronger Chicago soyoil price and higher crude oil prices.
By midday, the benchmark contract for palm oil delivery in April on the Bursa Derivatives exchange had gained 63 Ringgit (1.47%) to 4,352 Ringgit ($969.91). In the last four sessions, it gained 2.36%.
Anilkumar bagani, commodity researcher at Mumbai's Sunvin Group, said that the futures for crude palm oil (CPO), which are based on Chicago soyoil, have been moving higher since last Friday.
He said that U.S. President Trump’s import tariffs against Mexico, Canada, and China have pushed up U.S. prices for soyoil.
The recovery of CPO prices was also boosted by the strong recovery of global energy prices, and the short-covering in CPO futures.
Chicago Board of Trade Soyoil Prices Added 1.67% Dalian Commodity Exchange will be closed for Chinese Lunar New Year from January 28 to February 4th.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
The price of crude oil jumped after Trump's tariffs sparked fears about supply disruptions from the two biggest suppliers of fuel to the U.S. but the possibility of lower fuel demand tempered the rise.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's currency, the U.S. Dollar, fell by 0.83%, making the commodity more affordable for buyers who hold foreign currencies.
According to cargo surveyors, Malaysian palm oil imports fell between 12.3% and 20% in January.
A trade ministry official announced that Indonesia has lowered the crude palm oil price reference for February from $1,059.54 to $955.44 per metric ton.
Export tax in February will be $124 per ton, compared to $178 last month.
Technical analyst Wang Tao stated that palm oil could break through resistance at 4,315 Ringgit and move up to the 4,364-4.425 range.
(source: Reuters)
