JAKARTA: Malaysian palm oil futures closed up on Monday, following emergence of new buying interest and short coverings.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 94 ringgit or 1.84% to 5,195 ringgit ($1,178.81) a metric ton on the closing, the highest since mid June 2022.
“Price started rally after the futures hit 5,100 ringgit due to emergence of new buying interest and short coverings and lifted the futures to a new high of 5,200 ringgit,” a Kuala Lumpur-based trader said.
Malaysian benchmark palm oil futures have risen more than 35% this year and are expected to trade above to around 5,000 ringgit ($1,141) per metric ton until June 2025, supported by tight supply and bullish demand.
The Malaysian Palm Oil Board (MPOB) monthly data on Monday showed that palm oil stocks shrank the most in seven months in October as exports surged, production fell and domestic consumption increased.
Exports of Malaysian palm oil products for Nov. 1-10 fell 15.8% to 429,455 metric tons from a month earlier, cargo surveyor Intertek Testing Services (ITS) said on Monday.
Exports of Malaysian palm oil products for Nov. 1-10 fell 14.6% to 419,094 tonnes from 490,582 tonnes shipped during Oct. 1-10, independent inspection company AmSpec Agri Malaysia said on Monday.
Dalian’s most-active soyoil contract fell 0.47%, while its palm oil contract gained 2.16%. Soyoil prices on the Chicago Board of Trade were up 0.37%.
Palm oil tracks price movements of rival edible oils, as it competes for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, weakened 0.62% against the U.S. dollar, making the vegetable oil cheaper for buyers holding foreign currencies.
Oil prices were little changed on Monday as the threat of supply disruptions from a U.S. storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.