Palm oil extends gains on better demand from key buyers
29/05/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures rose for a second consecutive session on Wednesday, as demand from top buyers India and China and strength in rival Dalian contracts underpinned the market.
The benchmark palm oil contract FCPOc3 for August delivery on the Bursa Malaysia Derivatives Exchange closed 73 ringgit, or 1.84%, higher at 4,033 ringgit ($857.72) per metric ton.
Good demand from key destinations India and China as well as support from rival sunflower oil and soyoil have raised Malaysian palm oil futures to the 4,000 ringgit range, said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
"In the coming weeks, we may see the contract touching the 4,150 ringgit range," Saiya said. Malaysian palm oil exports for May 1-25 rose between 2.4% and 3.1% from the month before, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Cargo surveyor Societe Generale de Surveillance estimated the exports at 949,451 tons, compared with 931,938 tons a month earlier, according to LSEG. Dalian's most-active soyoil contract DBYcv1 gained 1.02%, while its palm oil contract DCPcv1 added 1.55%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.48%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices rose on Wednesday on expectations that major producers will extend output cuts at a meeting on Sunday and that fuel consumption will start rising with the start of the peak summer demand season.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit MYR=, palm's currency of trade, weakened 0.21% against the dollar, making the commodity less expensive for buyers holding foreign currency.