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Monday, December 6, 2021

Palm oil rises over 1%, tracking higher rival oils, crude

KUALA LUMPUR: Malaysian palm oil futures rose more than 1% on Monday as the contract rolled over to a new month, tracking strength in rival oils and crude futures, and supported by tight supply.

The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange closed up 89 ringgit, or 1.83%, to 4,948 ringgit ($1,186.71) a tonne.

Global vegetable oil prices, which have hit multi-year highs in recent months, are set to decline during the first half of 2022 due to a strong recovery in production and inventories, according to a forecast from leading analyst Thomas Mielke.

The Malaysian Palm Oil Council (MPOC) forecast crude palm oil (CPO) prices to stay above 4,600 ringgit a tonne for the rest of the year as production in the world’s second-largest producer will likely decline to 18.4 million tonnes in 2021.

Indonesia’s CPO exports in 2021 are expected to fall 54.4% from a year earlier, as top buyer India opts for refined palm products amid high crude prices, according to the Indonesia Palm Oil Association (GAPKI).

India, the world’s largest edible oil buyer, last week cut import taxes on crude and refined varieties of palm oil, soyoil and sunflower oil.

The Indian Vegetable Oils Producers Association has said it is seeing early signs of demand shifting from palm oil to soft oils as the lower duties make soft oil more attractive.

Dalian’s most-active soyoil contract rose 2.4%, while its palm oil contract gained 2.9%. Soyoil prices on the Chicago Board of Trade were up 0.2%.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.

Oil prices hit their highest level in years as demand recovers from the COVID-19 pandemic, making palm a more attractive option for biodiesel feedstock.

The Malaysian bourse will be closed on Tuesday for a public holiday.

Palm oil rises over 1%, tracking higher rival oils, crude

Source: Brecorder

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