Malaysian palm oil futures rose on Friday on bargain-hunting after three straight sessions of losses, with traders expecting seasonally lower production and firm exports to help stocks ease further. Palm oil posted a loss of 1.3 percent for the week, weighed down by a weak soy market suffering from poor export demand and higher South American supply.
But market participants said they were still counting on a seasonal decline in output to help ease stocks and support prices, especially after cargo surveyor data on Friday showed firm export demand. "We see some retracement in an oversold market," said a trader with a foreign commodities brokerage in Kuala Lumpur. "For the past few days external markets like Dalian and CBOT soybean oil were a little weak, but they have pulled back up a bit, so our market is adjusting to it."
The benchmark May contract on the Bursa Malaysia Derivatives Exchange had gained 2.2 percent to 2,415 ringgit ($774) per tonne by the market close. Prices fell to 2,360 ringgit on Thursday, the lowest level since January 14. Total traded volume stood at 35,268 lots of 25 tonnes each, higher than the usual 25,000 lots. Technical analysis suggests palm oil is expected to rebound to 2,426 ringgit per tonne, said Reuters market analyst Wang Tao.
Exports of Malaysian palm oil products from March 1 to 15 inched up 0.2 percent to 675,210 tonnes from 673,555 tonnes shipped during February 1 to 15, cargo surveyor Intertek Testing Services said on Friday. Malaysia, the world's No 2 palm oil producer, will set its crude palm oil export tax for April at 4.5 percent, unchanged from March, a government circular showed on Friday. In other vegetable oil markets, US soyaoil for May delivery inched up 0.9 percent in late Asian trade. The most-active September soybean oil contract on the Dalian Commodities Exchange also gained 1.4 percent.