KUALA LUMPUR: Malaysian palm oil futures were little changed on Thursday after three consecutive sessions of gains, amid supply concerns and expectations of declining production in the world’s second-biggest producer.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 1 ringgit, or 0.03%, to 3,878 ringgit ($813.68). There are concerns about supply constraints, with forecasts from Malaysian planters showing a sharp decline in production, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
“However, exports are expected to remain sanguine as there are signs of Indian buyers returning and anticipation for stockpiles to dip below the 2-million-ton threshold,” Supramaniam said. Malaysia’s palm oil stocks likely fell for three straight months to end-January, in line with seasonal low production.
Palm oil stocks were seen falling to 2.14 million metric tons in January, down 6.62% from December, according to 10 traders, planters and analysts. Crude palm oil output was seen declining 11.83% from the previous month to 1.37 million tons. The Malaysian Palm Oil Board will release its monthly data on Feb. 13.
Dalian’s most-active soyoil contract rose 0.96%, while its palm oil contract added 1.52%. Soyoil prices on the Chicago Board of Trade were up 0.83%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil extended gains on Thursday after Israel rejected a ceasefire offer from Hamas, while a weaker dollar also supported prices.
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, fell 0.15% against the dollar, making the commodity less expensive for buyers holding the foreign currency.
Source: Brecorder
