05/01/2024 (Hellenic Shipping News) - Malaysian palm oil futures rose for a second consecutive session on Friday as investors assessed the prospects of production cuts in Malaysia.

The benchmark palm oil contract FCPOc3 for March delivery on the Bursa Malaysia Derivatives Exchange was up 12 ringgit, or 0.3%, and last traded at 3,669 ringgit ($789.54) a metric ton by the midday break.

The benchmark contract has fallen 1.3% so far this week and is set topost its second straightweek of losses.

“Expectations of tightening supplies in Malaysia supported prices, but uncertainties aroundtropical oil exports demand capped the gains,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand & Co.

Malaysia’s palm oil inventories by end-Decemberlikely fell further, despite shrinking exports, as production declined, according to a Reuters survey.

Analysts also expect adecrease in palm oil stocks as the festive season concludes.

India’s palm oil imports in December rose to their highest in four months as purchases of refined palmolein surged because of competitive prices, five dealers told Reuters.

Dalian’s most-active soyoil contract DBYcv1 was up 0.3%, while its palm oil contract DCPcv1 gained 1%.

Soyoil prices on the Chicago Board of Trade BOcv1 climbed 0.5%.

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

Hot, dry weather in Brazil, the world’s biggest soybean exporter, hadraised concerns over the availability of supply. However, these worries have faded afterrains earlier this week.

In addition, therehave been more suppliesfrom other South American producers like Argentina.

The Malaysian ringgit MYR=, palm’s currency of trade, weakened 0.3%against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.

Palm oil still targets a range of 3,691 ringgit-3,711 ringgit per metric ton as it may have completed a fall from 3,794 ringgit, said Reuters technical analyst Wang Tao. TECH/C

Source: Reuters

https://www.hellenicshippingnews.com/palm-oil-gains-on-expectations-of-supply-cuts/