NEW DELHI: Malaysian palm oil futures settled higher for a fourth straight session on Tuesday, fuelled by lower inventories and mounting concerns over dry weather conditions shrinking output in top producing countries.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 11 ringgit, or 0.29%, to close at 3,756 ringgit. “The two main factors that continue to impact prices are prospects of lower production and falling stocks,” a Mumbai-based dealer said.
Malaysia’s palm oil stocks at the end of November fell for the first time in seven months as production slumped more than exports, data from industry regulator showed last week.
Indonesia, the world’s biggest palm oil producer, exported 3.00 million metric tons of palm oil products in October, down 31% from the same month last year, data from the Indonesian Palm Oil Association (GAPKI) showed on Tuesday.
Exports of Malaysian palm oil products in the first half of December fell 13.6% month-on-month to 591,490 metric tons, cargo surveyor Intertek Testing Services said on Friday.
Soyoil futures on the Chicago Board of Trade were down 0.65%. Indonesia plans to set its crude palm oil reference price at $767.51 per metric ton for the Dec. 16-31 period, down from $795.14 in the first half of the month.
India’s palm oil imports in November jumped to a near three-month high, up nearly 23% from October as refiners preferred the tropical oil over rival soyoil and sunflower oil due to steep discounts, a leading trade body said.
Palm oil may bounce more into a range of 3,813-3,835 ringgit per metric ton, as it has briefly pieced above a resistance zone of 3,775-3,781 ringgit. Meanwhile, oil steadied on Tuesday as investors considered the potential impact on oil supply from attacks by Yemen’s Iran-aligned Houthi against ships in the Red Sea, which have disrupted maritime trade and forced companies to reroute vessels. Crude oil’s prices affect palm oil, as it is an option for biodiesel feedstock.
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