Malaysian crude palm oil prices ended nearly 5 percent higher on Tuesday on the back of stronger export data and on expectations that soyaoil prices would continue to rise overnight, traders said.
"The export figures are still looking good. Even with those high prices, there are still buyers," a dealer said, referring to a 45.5 percent jump in Malaysian palm oil exports in the period from March 1-10. The benchmark May contract on the Bursa Malaysia Derivatives Exchange ended up 173 ringgit, or 4.7 percent, at 3,838 ringgit ($1,199) tonne after rising as high as 3,870 ringgit a tonne.
The price of the reddish-brown oil, used for cooking and in products ranging from biscuits to biofuels, is now 14 percent below its historic high of 4,486 ringgit a tonne hit on March 4.
Another dealer said expectations for demand from China also offered support to the market. "People are anticipating good exports for the month. There is still probably demand coming in from China," said the dealer in Kuala Lumpur.
Dealers said an expected gain in soyaoil prices in Chicago and record high crude oil price would probably drive prices higher on Wednesday. Palm oil and soyaoil are used to make biodiesel and their prices are now strongly correlated with the price of crude oil.
"There's no need to work too hard today to bring the market to 3,900-4,000 level. With the help of Chicago tonight, the market will probably start higher tomorrow," the second dealer said. May soyaoil futures were up 1.10 US cents per pound at 63.24 cents per pound on Tuesday.
Crude oil rose to a record high for the fifth day in a row on Tuesday, boosted by investor flows into oil and other commodities partly to hedge against inflation and the weak dollar. US light crude for April delivery rose 95 cents to $108.82 a barrel, after touching a record high of $109.20 a barrel. In the physical market, crude palm oil for April delivery was traded at 3,850 ringgit a tonne in central region and 3,900 ringgit a tonne in the southern region.
Comments
Comments are closed.