NEW DELHI: Malaysian palm oil futures ended marginally higher on Wednesday after industry data showed inventories in the world’s second-largest producer rose more than expected last month.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange closed up 16 ringgit, or 0.41%, at 3,901 ringgit a metric ton.
On Tuesday, the Malaysian Palm Oil Board (MPOB) said the country’s palm oil stocks at the end of August rose 7.34% from the previous month to 1.88 million metric tons, the highest level in six months.
Crude palm oil production gained 2.87% to 1.89 million metric tons, while palm oil exports fell 9.74% to 1.53 million metric tons, the board said.
A Reuters survey had forecast inventories at 1.86 million metric tons, with output seen at 1.89 million metric tons and exports at 1.5 million metric tons.
The market is trading sideways due to a lack of clarity “over the future course of price action and also (the) market is waiting for Indonesian palm oil export levies and duty policy revision,” said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin group.
Indonesia, the biggest palm oil exporter, plans to lower export duties to improve competitiveness and raise farmers’ income.
Palm oil may break support at 3,856 ringgit per metric ton and fall towards the 3,782 ringgit to 3,796 ringgit range.
Oil climbed more than 2% on Wednesday, paring some of the previous day’s losses, as a drop in US crude inventories and concern about Hurricane Francine disrupting US output countered concerns about weak global demand.
Higher crude oil futures make palm an attractive option for biodiesel feedstock.
US stock futures faltered, the dollar was on the defensive and bond prices rallied, as markets reacted to a US presidential debate in which Vice President Kamala Harris put Republican Donald Trump on the defensive.
Comments
Comments are closed.