KUALA LUMPUR: Malaysian palm oil futures jumped 3% on Thursday, recovering from the previous session’s steep decline, on tightening production and gains in rival soyoil.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended up 143 ringgit, or 3.35%, at 4,409 ringgit ($1,048.76) a tonne.
Preliminary polls suggest a widespread decline in palm fruit harvesting in Peninsula Malaysia during Dec. 1-15, with planters reporting production decline of around 10%, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Dalian’s most-active soyoil contract gained 0.05% while its palm oil contract slipped 0.02%. Soyoil prices on the Chicago Board of Trade were up 1% after jumping 2.5% overnight.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm had plunged 4.5% on Wednesday after cargo surveyors reported a larger-than-expected drop in exports during the first half of December.
Exports of Malaysian palm oil products for Dec. 1-15 fell 13.4% to 789,549 tonnes from the same period in November, cargo surveyor Societe Generale de Surveillance said.
Oil rose towards $75 on Thursday supported by record US implied demand and falling crude stockpiles, even as the spread of the Omicron coronavirus variant threatens to put a brake on consumption globally.
Stronger crude oil futures typically make palm a more attractive option for biodiesel feedstock.
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