Palm gains on low inventory, expectations of weak output
29/10/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures rose on Tuesday, driven by expectations of reduced palm production and lower inventory levels in the country.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained RM20, or 0.44 per cent, to RM4,549 (US$1,041.44) a metric ton at the midday break.
The palm oil futures market is higher due to expectations of weak output and lower stock levels in the country, supported by strong demand, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Dalian's most-active soyoil contract fell 1.28 per cent, while its palm oil contract shed 0.09 per cent.
Soyoil prices on the Chicago Board of Trade were up 0.28 per cent.
Palm oil tracks prices of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices edged up after a sharp plunge on Monday, as a U.S. plan to purchase oil for the Strategic Petroleum Reserve provided support, while investors remained focused on developments in the Middle East.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm's currency of trade, weakened 0.23 per cent against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.