VEGOILS-Palm oil scales near four-week peak on China reopening hopes
28/12/2022 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures ticked up on Wednesday, hovering near a near four-week high on hopes of a recovery in demand after China eased COVID-19 curbs.
The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange gained 9 ringgit, or 0.22%, to 4,109 ringgit ($928.60) a tonne by the midday break, hitting its highest since Dec 2.
In a major step towards freer travel, cheered by global stock markets on Tuesday, China will stop requiring inbound travellers to go into quarantine from Jan. 8, the National Health Commission (NHC) said late on Monday.
Malaysian benchmark crude palm oil spot prices will average at $850 (3,770 ringgit) per tonne 2023, significantly lower than $1,175 in 2022, Fitch Ratings said in a report.
"The outlook for palm oil demand growth has been boosted by Indonesia's decision in December 2022 to increase the share of palm-oil based fuel in diesel. However, we expect supply to increase from 2Q23, and cause prices to drop in 2H," Fitch said.
The ringgit MYR=, palm's currency of trade, fell 0.11% against the dollar, making the edible oil cheaper for buyers holding other currencies.
Dalian's most-active soyoil contract DBYcv1 rose 1.3%, while its palm oil contract DCPcv1 also gained 1.3%. Soyoil prices on the Chicago Board of Trade BOcv1 were up 0.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
($1 = 4.4250 ringgit)