KUALA LUMPUR: Malaysian palm oil futures ended 1 percent higher on Wednesday, recouping losses on robust demand and as the market digested smaller-than-expected end-June inventories.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 39 ringgit, or 1%, at 3,928 ringgit ($845.09) a metric ton.
The market is still taking bullish cues from the Malaysian Palm Oil Board (MPOB) report, but the fresh destination demand is required to hold the gains, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
End-June inventories rose 1.9% to 1.72 million metric tons from the prior month, but much smaller than forecast, MPOB said on Monday.
Exports from Malaysia during the July 1-10 period rose between 18.7% and 26.1%, data from cargo surveyors Amspec Agri and Intertek Testing Services showed on Monday, as demand from key consumer China grew.
Demand during the third and fourth quarters of the year is likely to be strong, said Marcello Cultrera, director at Singapore-based commodities consultancy Apricus 8 Pte Ltd.
This will be driven by forecast of lower production in the third quarter in Malaysia and Indonesia, strengthening palm oil prices compared to soft oils in Europe and China, and positive palm oil import margins in India, he said.
Dalian’s most-active soyoil contract fell 0.4%, while its palm oil contract fell 0.9%. Soyoil prices on the Chicago Board of Trade were up 1.8%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Comments
Comments are closed.