Palm gains on bargain buying, recovery in Dalian palm olein
19/11/2024 (Reuters), Kuala Lumpur - Malaysian palm oil futures closed higher onTuesday, supportedby bargain buying and a recovery in the Dalian palm olein market.
The benchmark palm oil contract FCPOc3 for February delivery on the Bursa Malaysia Derivatives Exchange ended 23ringgit, or 0.47% higher,at 4,922ringgit ($1,100.87) a metric ton. The contract fell 3.71% in the previous session.
The palm market was seen trading up on bargain buying and due to a bullish recovery in Chinese palm olein futures during Asian hours, said Anilkumar Bagani, research head at Sunvin Group.
"The bullish rebound is also due to energy prices and overall tightness in the palm oil supply situation ahead of Indonesia'sB40 biodiesel mandate and the Ramadan holidays," Bagani said.
Last week, Indonesia's government reaffirmed to lawmakers a plan to implement a 40% mandatory biodiesel mix with palm oil-based fuel, known as B40, in January 2025.
Separately, traders are anticipating a market correction, and with the approaching winter season, demand from India is expected to decrease, a Mumbai-based trader said.
"Given that India is price-sensitive as well, exports are projected to decline in November," the trader added.
Dalian's most-active soyoil contract DBYcv1 rose 0.46%,while its palm oil contract DCPcv1 shed 0.26%.Soyoil prices on the Chicago Board of Trade BOcv1 were down 0.37%.
Palm oil tracks the price movements of rival edible oils, as they compete for a share of the global vegetable oils market.
Cargo surveyors are expected to release their estimates for Malaysian palm oil exports for the Nov. 1-20 period on Wednesday.
Crude oilslipped pressured by the restart of production at Norway's Johan Sverdrup oilfield, although investor caution arising from fears of an escalation in the Russia-Ukraine war limited the decline. O/R
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit MYR=, palm's currency of trade, strengthened 0.16% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
($1 = 4.4710 ringgit)