03/01/2023 (Nasdaq), Kuala Lumpur - Malaysian palm oil futures ticked up in the first trading session of the year on Tuesday, underpinned by expectations of slowing production and tighter Indonesian supply.

The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange gained 41 ringgit, or 0.98%, to 4,215 ringgit ($961.23) a tonne by the midday break.

The contract averaged 4,190 ringgit ($952.27) in 2022, and logged its first annual decline in four years.

Indonesian officials said on Friday the country would tighten export rules for palm oil from Jan. 1 by allowing fewer shipments overseas for every tonne sold domestically to ensure sufficient and affordable cooking oil supply at home.

India has extended a policy to allow imports of vegetable oils such as palm oil, soyoil and sunflower oil at lower taxes by a year until March 2024, the government said last week.

"Market is higher banking on lower first quarter output and decline in stocks," said Sathia Varqa, co-founder of Singapore-based Palm Oil Analytics.

Capping gains, exports from Malaysia in December fell between 1.7% and 2.8% from the prior month, cargo surveyors said on Saturday.

Dalian's most-active soyoil contract DBYcv1 rose 0.4%, while its palm oil contract DCPcv1 gained 0.8%. The Chicago Board of Trade BOcv1 was closed for a public holiday.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Palm oil is expected to rise to 4,289 ringgit per tonne, as suggested by a projection analysis, Reuters technical analyst Wang Tao said. TECH/C

Source: Reuters

https://www.nasdaq.com/articles/vegoils-palm-oil-edges-up-on-tighter-supply-outlook