KUALA LUMPUR: Malaysian palm oil futures opened higher on Wednesday, tracking strength in Dalian edible oils, while firmer crude oil prices made palm a more attractive option for biodiesel feedstock.
Malaysian palm oil future up
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange rose 18 ringgit, or 0.44%, to 4,147 ringgit ($886.11) during early trade.
Fundamentals
Dalian’s most-active soyoil contract edged 0.08% higher, while its palm oil contract added 0.43%. Soyoil prices on the Chicago Board of Trade were down 0.33%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose on expectations of strong global demand, including in the world’s top consumer the United States, and as even somewhat sticky US inflation did not dent expectations the Fed might start cutting rates soon.
The Malaysian ringgit, palm’s currency of trade, fell 0.11% against the dollar, making the commodity less expensive for buyers holding the foreign currency.
Malaysia’s palm oil stocks at the end of February dwindled to their lowest levels in seven months as production hit a 10-month low, offsetting the slowdown in exports.
Inventories at the end of last month fell 5% to 1.92 million metric tons from levels seen in January, crude palm oil production declined 10.18% to 1.26 million tons, while exports plunged 24.75%, data from industry regulator the Malaysian Palm Oil Board showed on Monday.
Source: Brecorder
