JAKARTA: Malaysian palm oil futures climbed for a second session on Tuesday as concerns of tight supply persisted, while strong gains in rival oils also helped prices. The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange ended 0.87% higher at 5,012 ringgit ($1,208.29) per tonne, extending a 0.93% gain a day earlier.
It rose as much as 1.97% earlier in the session before some profit-taking pared gains. “The tightness supply due to lack of palm oil production pace at both Malaysia and Indonesia is persistently supporting the higher prices and the bullish energy market is providing the cover to the fire,” Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, said in a note.
Malaysian palm oil yields are expected to taper down toward the year-end and likely remain weak in the first quarter of 2022 due to coronavirus-linked labour shortage, he added.
In rival Indonesia, its biggest palm oil industry group has revised down its 2022 exports outlook, while output prediction was lowered to 47.5 million tonnes from a prior 49 million tonnes.
Meanwhile, Dalian’s palm oil contract rose 2.02%, while the most-active soyoil contract gained 1.28%. On the Chicago Board of Trade, soy oil prices were up 0.14%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
On the technical front, palm oil may revisit its Oct. 22 low of 4,816 ringgit per tonne, as the bounce from this level is ending, Reuters technical analyst Wang Tao said.