VEGOILS-Palm closes higher despite weak demand, Indonesia export rate uncertainty
The price of Malaysian palm oils futures rose on Tuesday after recovering from losses earlier in the day. However, a sluggish market demand, uncertainty about Indonesia's export rate and a slight increase in domestic production limited its gains.
At the close, the benchmark April palm oil contract on Bursa Derivatives Exchange rose 64 ringgit or 1.52% to 4,282 Ringgit ($975.84). The contract has risen 0.67% over the last two sessions.
Anilkumar bagani, head of commodity research at Mumbai's Sunvin group, explained that the crude palm oil futures prices were affected by a small recovery in production and uncertainty about Indonesia's export tax rates.
Bagani stated that the trading volume is low due to the Lunar New Year holiday in China and weak demand for destinations from key markets.
The Chicago Board of Trade reported a 0.78% increase in soyoil. Dalian Commodity Exchange will be closed for Lunar New Year from January 28 to February 4 due to the holidays.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Palm's trade currency, the ringgit (dollar), has fallen 0.3%, making it cheaper for buyers who hold foreign currencies.
The oil prices rose slightly but were still near their two-week lows, as the weak economic data out of China and the rising temperatures in other parts of Europe dampened demand expectations.
The Brazilian soybean crop in 2024/25 is forecast to be 171 million metric tonnes, according to agribusiness consulting firm AgRural. This was a reduction of 500,000 tons from its previous estimate due to lower yields across the states Mato Grosso do Sul (MGS), Parana (Parana) and Rio Grande do Sul (Rio Grande do Sul). Reporting by Ashley Tang, Editing by Eileng Soreng and Tasimzahid.
(source: Reuters)
