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Palm oil gains 3pc, hits one-week closing high
calendar29-03-2023 | linkBusiness Recorder | Share This Post:

29.03.2023 (Business Recorder) - SINGAPORE: Malaysian palm oil futures rose more than 3% on Tuesday to their highest closing in one week, tracking strength in rival edible oils and on expectations of tightening supply.

 

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange closed up 114 ringgit, or 3.19%, to 3,690 ringgit ($839.02) a tonne.

 

Palm rose for a second consecutive day and logged its sharpest daily rise in five weeks.

 

The contract surged following strength in global vegetable oil markets and an overnight recovery in crude oil prices, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

 

Investors are expecting Malaysia end-March stocks to fall below 2 million tonnes due to higher exports and lower production, and are expected to decline further in April due to Indonesia’s export restriction till the end of Ramadan, said Bagani.

 

Palm oil’s rare premium over rival rapeseed oil and sunflower oil is likely to be short-lived and it should start trading at a discount once top producer Indonesia eases export curbs after Ramadan, industry participants told Reuters.

 

Indonesia plans to set crude palm oil reference price for April 1-15 at $898.29 per tonne.

 

Exports of palm oil products for Mar. 1-25 rose 18.5% compared to shipments during Feb. 1 to Feb. 25, cargo surveyor Societe Generale de Surveillance said on Tuesday.

 

Dalian’s most-active soyoil contract rose 2.2%, while its palm oil contract strengthened 2.7%. Soyoil prices on the Chicago Board of Trade 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.

 

Crude prices retreated on Tuesday after rallying in the previous session, with markets focused on developments in the banking crisis and indications of strengthening demand in China.

 

Lower oil prices make palm oil a less attractive option as biodiesel feedstock.

 

Palm oil may revisit its September 2022 low of 3,220 ringgit per tonne in the next quarter, as a bounce from this level is over, Reuters technical analyst Wang Tao said.

 

https://www.brecorder.com/news/40234035/palm-oil-gains-3pc-hits-one-week-closing-high