Palm prices rise on lower-than-expected end-Nov stock forecasts
Malaysian palm futures rose on Thursday due to lower estimated November stocks. The country is the second largest palm oil exporter in the world.
By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for February delivery had gained 70 ringgit or 1.39% to $5,102 ringgit (1,152.47 USD) per metric ton.
A survey shows that Malaysian palm oil inventories fell to 1,79 million tons during November. This is the second consecutive month of declines as torrential rainfall disrupted production.
Anilkumar bagani, head of commodity research at Mumbai's Sunvin group, said that the decline in stock in November could bring the end stocks for Malaysian Palm Oil below 2 million tonnes by 2024. This would be a positive sign for palm oil prices going into 2025.
He added that low stocks in Malaysia would be good for palm because Indonesian palm oil exports are expected to be tight in the first quarter of next year due to its B40 biodiesel mandat and Ramadan holidays.
He said that in Indonesia's palm oil producing areas, where there was a surplus of rainfall, it caused landslides and hampered harvesting in some areas. In other areas, however, the moderate rainfall patterns had sustained healthy palm growth.
Dalian's palm oil contract, which is the most active contract, fell by 0.89%. Chicago Board of Trade Soyoil increased by 0.75%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Early trading saw the Malaysian Ringgit, which is the contract currency for palm trade, strengthen by 0.52% against U.S. Dollar. Palm becomes less appealing to foreign currency holders when the ringgit strengthens.
The technical analyst Wang Tao predicted that palm oil would retest the resistance level of 5,162 ringgit a ton. This is due to a wave 5. ($1 = 4.4270 ringgit)
(source: Reuters)
