Palm oil gains on renewed Chinese buying
22.05.2023 (Business Recorder) - KUALA LUMPUR: Malaysian palm oil futures ended higher on Friday, lifted by renewed buying by key importer China, even as prices clocked their first weekly drop in three.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 88 ringgit, or 2.59%, to 3,480 ringgit ($784.67) a tonne, after a four-day slump.
For the week, the contract lost 4.6%.
Palm rose following some bullish momentum in Chicago soy oil futures overnight and renewed Chinese buying this week, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“Palm oil inventories have eased in China and India, while import margins have opened up for refined palm olein in China and for crude palm oil in India after prices eased from recent highs,” he said.
Further supporting prices, the ringgit fell 0.04% against the dollar, making the commodity cheaper for buyers holding foreign currency.
Malaysia maintained its June export tax for crude palm oil at 8% and raised its reference price, a circular on the Malaysian Palm Oil Board website showed on Thursday.
A higher export tax in Malaysia makes its palm oil products less competitive to larger rival Indonesia, which lowered its payable export taxes for the May 16-31 period.
Dalian’s most-active soyoil contract and its palm oil contract both gained 0.5%. Soyoil prices on the Chicago Board of Trade were up 1.2%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.