JAKARTA: Malaysian palm oil futures closed with a 19.43% annual gain on Tuesday, snapping two consecutive years of losses, although the market traded lower for the day due to a lack of fresh buying at the year-end.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 107 ringgit, or 2.35%, to 4,444 ringgit ($994.63) per metric ton at the close.
“The futures were seen trading sharply lower today on lack of fresh buying from destination markets,” said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.
Dalian’s most-active soyoil contract gained 0.16% and its palm oil contract lost 1.1%. Soyoil prices on the Chicago Board of Trade inched lower by 0.45%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Malaysian palm oil futures lower on Dalian weakness, market awaits further leads
Oil prices rose on Tuesday after data showed China’s manufacturing activity expanded in December, but they are on track to end lower for a second consecutive year due to demand concerns in top consuming countries.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, fell 0.18% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
Cargo surveyors estimated Malaysian palm oil exports during Dec. 1-25 dropped 1.1%-4% from a month earlier.
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