Malaysian palm oil futures climbed on Monday as market sentiment rose alongside higher exports figures ahead of festivities, and firm soyaoil prices provided support. The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 1.24 percent at 2,684 ringgit ($620.58) a tonne.
Traded volumes stood at 74,034 lots of 25 tonnes each. "The market is reacting to positive sentiment over exports, as everyone is looking at better exports ahead of Ramazan," said a Kuala Lumpur-based trader. The trader said upbeat export data could keep palm on an upward momentum, leading up to the festive period. Cargo surveyor Intertek Testing Services' data on Monday showed exports of Malaysian palm oil products for the May 1-15 period rose 8.9 percent to 617,697 tonnes, from 567,280 tonnes shipped during April 1-15.
Data from cargo surveyor Societe Generale de Surveillance released on Monday also indicated better exports for the same period, 7.1 percent higher to 613,465 tonnes from 572,910 tonnes shipped during April 1-15. "Overnight soyaoil prices have improved tremendously, lending support to palm as well," he added. Soyabean oil on the Chicago Board of Trade was up 0.40 percent, continuing northward after two sessions of gains, while the September soyabean oil contract on the Dalian Commodity Exchange rose 0.34 percent.
Palm prices are impacted by the movements of rival oilseed soya, as they compete for a share in the global vegetable oils market. At an earnings briefing on Monday, Olam International Ltd CEO Sunny Verghese said crude palm oil (CPO) could trade between 2,200 and 2,700 this year. "We expect a 2.7 million tonne increase in Malaysian CPO production in 2017, which will take Malaysian production to about 20 million tonnes. And we expect a 3.6 million tonne increase in CPO production in Indonesia, which will take Indonesian production to roughly 34.8 million tonnes," he said. In other related vegetable oils, the September contract for palm olein was down 0.07 percent.
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