KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday to a one-month closing high, as investors awaited key monthly data amid concerns of tightening supply from top producer Indonesia.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange rose 59 ringgit, or 1.5%, to 3,998 ringgit ($930.42) a tonne, its third consecutive daily climb.
Indonesia will review its palm oil export quota ratios amid rising prices of domestic cooking oil, the Coordinating Ministry of Maritime and Investment Affairs said on Monday, raising fears that Jakarta would further limit its exports.
Gains in the Malaysian ringgit and Indonesia’s rupiah have made palm oil more expensive for international buyers, but demand is expected to improve ahead the Islamic holy month of Ramadan in March, Refinitiv Agriculture Research said in a note.
“Looking ahead, attention will be focused on Malaysia’s migrant worker arrivals, high flooding risks in the region, potentially tighter Indonesian palm oil exports and higher Ramadan festive demand,” Refinitiv said.
A new European Union law preventing the import of commodities linked to deforestation risks sidelining small farmers who are unable to meet the burdensome cost of compliance, the Roundtable on Sustainable Palm Oil (RSPO) told Reuters on Tuesday.
The US Department of Agriculture will provide a fresh update on harvest prospects in its World Agricultural Supply and Demand Estimates report later in the day, while the Malaysia Palm Oil Board and cargo surveyors are scheduled to release key supply and demand data on Friday.
Dalian’s most-active soyoil contract rose 1.2%, while its palm oil contract gained 1.4%. Soyoil prices on the Chicago Board of Trade were up 0.03%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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