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Thursday, February 29, 2024

Palm rises as crude, soyoil strengthen

JAKARTA/KUALA LUMPUR: 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 2.33% to 5,760 ringgit ($1,370.45) a tonne.

“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.

Palm logs 16% weekly fall, sharpest since 1986

Exports of Malaysian palm oil products for March 1-20 were down around 8% from Feb. 1-20, according to cargo surveyor Intertek Testing Services and independent inspection company Amspec Agri.

“We had expected the second-half March export to ease and it is evident now. However, since second half of March has more working days (than that in February), the full month export may still come at par or slightly higher,” said Anilkumar Bagani, research head of Mumbai-based brokerage Sunvin Group.

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 2.23%. Dalian’s most-active soyoil contract dropped 1.63%, while its palm oil contract fell 2.26%.

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 gains accrued after Russia invaded Ukraine late last month.

Oil prices jumped more than $3 on Monday as European Union countries consider joining the United States in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.

Stronger crude makes palm a more attractive option for biodiesel feedstock.

Palm rises as crude, soyoil strengthen

Source: Brecorder

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