BEIJING: Malaysian palm oil futures ended higher on Thursday, as forecast of lower production outweighed prospect of softer demand amid India’s duty concessions for imports of edible oils.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange closed up 16 ringgit, or 0.41%, at 3,895 ringgit ($825.56) a metric ton, up for a second day.
India, the world’s biggest importer of vegetable oils, on Wednesday allowed limited imports of corn, crude sunflower oil, refined rapeseed oil, and milk powder under the tariff-rate quota (TRQ), where importers pay nil or lower duty, as New Delhi tries to bring down food inflation.
Exports from Malaysia during June 1-25 fell between 16.1% and 16.9% from the same period in May, cargo surveyors Intertek Testing Services and AmSpec Agri Malaysia said earlier this week.
Production in the world’s second-largest grower during June 1-20 is forecast to decline 6.3% from a year-ago period, traders and analysts said, citing data from the Malaysian Palm Oil Association.
Palm touches near one-month low on poor demand
Dalian’s most-active soyoil contract gained 0.31%, while its palm oil contract rose 0.13%. Soyoil prices on the Chicago Board of Trade edged 0.7% higher.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices edged up on Thursday as supply disruption risks from rising geopolitical tensions in the Middle East helped to counter demand fears after a surprise build in U.S. stockpiles.
Higher crude oil futures make palm a more attractive option for biodiesel feedstock.
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