JAKARTA: Malaysia’s benchmark palm oil futures edged higher for the third consecutive session on Tuesday, supported by gains in rival edible oils and spread buying, but concerns over high stock levels in Indonesia weighed on sentiment.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 1.85%, to 4,237 ringgit ($944.28) a tonne by the end of the afternoon session after dropping as much as 1.37% earlier.
“Some buyers came in on spread buying between soyoil and crude palm oil,” a Kuala Lumpur-based trader said.
Dalian’s soyoil contract gained 0.87%, while its palm oil contract ended flat. Soyoil prices on the Chicago Board of Trade were 0.36% higher.
Palm oil is affected by price movements in related oils, as they compete for a share in the global vegetable oils market.
However, the trader added that buying momentum was met with gradual selling pressure as the market perceived high-end stocks are still looming in Indonesia.
Palm edges higher but posts 7% weekly loss
Palm oil inventories in Indonesia rose after an export ban that ended in May, amid efforts to control domestic cooking oil prices. Authorities have since tried to boost shipments despite imposing an export restriction following the ban.
Indonesia trade minister said that India is committed to importing 2.6 million tonnes of palm oil products, without providing details about the period for the sales.
Palm oil may test a resistance at 4,269 ringgit per tonne, as it has managed to hover above a support at 4,085 ringgit per tonne, Reuters technical analyst Wang Tao said.
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