Palm oil rises for third day on concerns over dry weather
15/06/2023 (Business Recorder), Kuala Lumpur - Malaysian palm oil futures rose on Thursday for a third consecutive session, lifted by concerns over hot weather cutting output of both the edible oil and rival U.S. soybeans.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 68 ringgit, or 1.97%, to 3,520 ringgit ($761.25) a metric ton, its highest closing since May 29.
Palm oil estates in Sabah, Malaysia’s largest producing state of the commodity, are experiencing water stress from early signs of El Nino, cutting yields and exacerbating the impact of under-fertilising and labour shortages seen over the past three years.
Capping gains, exports of Malaysian palm oil products for June 1-15 fell 16.6% from the same week in May, cargo surveyor Intertek Testing Services said. Another cargo surveyor AmSpec Agri Malaysia said exports fell 16.4%.
Palm fundamentals are weak and a stronger factor is needed for the price to move higher, a Kuala Lumpur-based trader said.
In top producer Indonesia, palm oil exports in April, including refined products, fell 1.93% annually to 2.13 million metric ton, data from the Indonesian Palm Oil Association showed on Thursday.
Indonesia plans to set its crude palm oil reference price at $723.45 per metric ton for the June 16-30 period, down from $811.68 currently, economics ministry official Musdhalifah Machmud said on Wednesday.
India’s palm oil imports in May plunged 14% from a month ago to a 27-month low as buyers cancelled expensive cargoes of the edible oil and replaced them with cheaper soyoil and sunflower oil, a leading trade body said on Thursday.
Soyoil prices on the Chicago Board of Trade rose 0.6% as concerns over dry weather conditions in the Midwest curbed crop prospects.
Dalian’s most-active soyoil contract rose 1.1%, while its palm oil contract gained 1.1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.