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Wednesday, July 6, 2022

Palm jumps 2% as traders seek detail on Indonesian sales rules

KUALA LUMPUR: Malaysian palm oil futures rose on Monday, buoyed by expected weak output in May, while traders assessed the impact of Indonesia’s domestic sales policy on global supplies.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange extended gains into a second session. The contract rose by 159 ringgit, or 2.6%, to 6,268 ringgit ($1,428.77) a tonne.

Top producer Indonesia’s three-week ban on exports of crude palm oil and some derivatives ended on Monday, but it restored local sales requirements aimed at ensuring domestic supply.

Indonesia’s Trade Ministry will require companies to secure export permits for their crude palm oil and olein shipments, with approval granted to those with proof they have met requirements on domestic sales volumes, a regulation document showed.

Palm ends higher

“The latest policy will reduce Indonesia’s palm oil supply in the global market, but (that is) more palatable than the entire shipments being banned,” Public Investment Bank said in a note.

The various policies are expected to cause more volatility to crude palm oil prices, it added.

Palm oil exports from Malaysia over May 1-20 rose between 28% and 32.6% from the same week in April, cargo surveyors said last week.

Production over May 1-20 was expected to be down 15% from the previous month, traders said, citing data from the Southern Peninsula Palm Oil Millers’ Association.

In related oils, Dalian’s most-active soyoil contract rose 1.6% while its palm oil contract gained 2.5%. Soyoil prices on the Chicago Board of Trade were up 1.1%.

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

Refinitiv Agriculture Research said it expects the contract to rise towards resistance levels of 6,363-6,383 ringgit this week, with support at 5,900 ringgit, underpinned by firm fundamentals.

Palm jumps 2% as traders seek detail on Indonesian sales rules

Source: Brecorder

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