NEW DELHI: Malaysian palm oil futures opened higher on Friday, extending gains from the previous session as the market tracked strength in Chicago soyoil oil.
The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange gained 22 ringgit, or 0.56%, to 3,957 ringgit ($847.69) in the early trade.
Fundamentals
Malaysia’s palm oil stocks at the end of June rose 4.35% from May to 1.83 million metric tons, the highest since February, the Malaysian Palm Oil Board (MPOB) said on Wednesday.
The MPOB attributed the rise in stocks to a steeper decline in exports compared with production.
Crude palm oil production declined 5.23% from May to 1.62 million tons, while palm oil exports plunged 12.82% to 1.21 million tons.
A Reuters survey had forecast inventories at 1.83 million tons, with output at 1.62 million tons and exports at 1.24 million tons.
India’s palm oil imports in June rose to hit the highest level in six months on robust demand from refiners for upcoming festivals.
Crude palm oil prices are expected to remain supported by tighter production conditions and strong demand from top buyers India and China, state agency Malaysian Palm Oil Council (MPOC) said.
Soyoil prices on the Chicago Board of Trade rose 1.0%.
Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
Palm oil may climb into a range of 4,018-4,058 ringgit per metric ton as an uptrend from the June 26 low of 3,830 ringgit may have resumed.