JAKARTA: Malaysian palm oil futures rose on Monday as markets attempted a modest recovery from their worst week since 1986, with stronger crude oil and Chicago soyoil outweighing pressure from weak export demand.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 3.46% to 5,824 ringgit ($1,386.01) a tonne by the midday break.
“Palm is tracking external markets as it is recovering. But the upside may be capped by weak exports for March 1-20,” a Kuala Lumpur-based trader said.
Exports of Malaysian palm oil products for March 1-20 seen down more than 8% from Feb. 1-20, according to cargo surveyor Intertek Testing Services and independent inspection company Amspec Agri.
Palm oil drops
Malaysia has maintained its April export tax for crude palm oil at 8%, a circular on the Malaysian Palm Oil Board website showed on Monday.
Soyoil prices on the Chicago Board of Trade were up 1.78%. Dalian’s most-active soyoil contract dropped 0.8%, while its palm oil contract fell 1.40%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm fell 16% last week, snapping a three-week rally and erasing most of the war risk premium accrued after Russia invaded Ukraine late last month.
Oil prices jumped $2 on Monday as Ukrainian forces dug in against heavy Russian attacks, while major oil producers reported they were struggling to produce their allotted quotas under a supply agreement.
Stronger crude makes palm a more attractive option for biodiesel feedstock.
Palm oil may fall to 5,400 ringgit per tonne, as it has broken a support at 5,757 ringgit, Reuters technical analyst Wang Tao said.