KUALA LUMPUR: Malaysian palm oil futures rose slightly on Tuesday as China called on its citizens to stock up on food ahead of winter, overturning a slump earlier in the session over expectations of higher end stocks and rumours of poorer exports.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange was up 0.16% to 4,969 ringgit ($1,198.50) a tonne, reversing the upbeat trend in early trade.
The Chinese government told families to keep daily necessities in stock in case of emergencies, after COVID-19 outbreaks and unusually heavy rains caused a surge in vegetable prices and raised concerns about supply shortages.
Earlier during the session, expectations of higher end stocks for October and market rumour of a drastic slowdown in exports to India weighed on sentiment for palm.
“We heard that Indian oil seed production for November is good and they should have plenty local oil in December,” a Kuala Lumpur-based trader said.
Dalian’s palm oil contract was down 0.29%, while soyoil contract rose 0.04%. Soyoil prices on the Chicago Board of Trade was unchanged.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retest a resistance at 5,048 ringgit per tonne, a break above could lead to a gain to 5,187 ringgit, Reuters technical analyst Wang Tao said.