JAKARTA: Malaysian palm oil futures rose for a second session on Monday, supported by strength in Dalian vegetable oils and bargain buying, however weak palm oil exports in the Jan. 1-20 period limited gains.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed 16 ringgit, or 0.38% higher, at 4,206 ringgit ($936.75) a metric ton.
“The bargain buying has been the main theme for palm oil markets since Friday...as the palm oil prices now at a discount against soyoil and sunflower oil and also the margins have started to improve at the key destination markets, especially India,” said Anilkumar Bagani, commodity research head at vegetable oil brokerage Sunvin Group.
Exports of Malaysian palm oil products for Jan. 1-20 are estimated to have fallen between 18.2% and 23%, according to cargo surveyors Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
“Malaysian palm oil export during January so far has been at the lower end and the production is not falling at the pace which was seen during December, (which) means the stocks are likely to show a rebound by the end of January,” Bagani added.
India’s palm oil imports are set to plunge to a near five-year low in January, hit by negative refining margins as the tropical oil’s premium over rivals drives buyers to more competitively priced soyoil, government and industry officials told Reuters.
Dalian’s most-active soyoil contract climbed 1.98%, while its palm oil contract was up 1.3%. The Chicago Board of Trade is closed on Monday for a holiday.
Palm oil tracks price movements in rival edible oils as it competes for a share of the global vegetable oils market.
Palm oil may bounce into a range of 4,265 ringgit to 4,315 ringgit per ton, as it has stabilised around support at 4,106 ringgit, said Reuters technical analyst Wang Tao.—Reuters
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