Palm oil prices rise on signs of demand pick-up
20.04.2020 (Business Recorder) –
- The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange settled down 0.13% to 2,232 ringgit ($510.76) per tonne after gaining as much as 1.7% during the session.
KUALA LUMPUR: Malaysian palm oil futures reversed early gains to end lower on Monday, as fears over a slump in India's edible oil demand due to the country's nationwide lockdown outweighed bullish export data.
The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange settled down 0.13% to 2,232 ringgit ($510.76) per tonne after gaining as much as 1.7% during the session.
“(The morning session's) prices ended higher on good buying interest from both traders and dealers," said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari Sdn Bhd.
Buyers are replenishing their inventories to avoid being caught with low stocks during their lockdown to contain the new coronavirus, Paramalingam said.
Malaysian palm oil exports in April 1-20 increased between 4.5% and 7.4%, according to two cargo surveyors' data released after market paused.
However, concerns of a plunge in edible oil consumption in the world's largest palm oil buyer India reversed the morning session's gains, as a nationwide lockdown forced the closure of restaurants and hotels.
Limiting palm's upside, crude oil prices fell on concerns U.S. storage facilities will soon be full as the novel coronavirus pandemic continues to affect demand and companies prepare to report their worst quarterly earnings since the 2008 financial crisis.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Dalian's most-active soyoil contract fell 0.73%, while its palm oil contract gained 1.04%. Soyoil prices on the Chicago Board of Trade were down 1.09%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.