KUALA LUMPUR: Malaysian palm oil futures rose on Friday as top producer Indonesia tightened export rules, although the benchmark contract logged an annual loss after three years of gains.
Palm oil prices witnessed volatility this year due to the Ukraine conflict-led tight supplies and a pandemic-related demand slump in key market China.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange ended the year higher by 88 ringgit, or 2.15%, at 4,178 ringgit ($949.55) a tonne. It lost 11% for the year.
Indonesia will tighten export rules for palm oil from Jan. 1, allowing less shipments overseas for every tonne sold domestically, as it seeks to ensure sufficient domestic supply, a government official said on Friday.
Better demand from China for the forward months as it reopens borders and production issues are supporting palm oil prices, said Mitesh Saiya, manager at Mumbai-based trading firm Kantilal Laxmichand & Co.
India has extended its policy to allow imports of lentils and vegetable oils such as palm oil, soyoil and sunflower oil at lower taxes until March 2024, the government said in a notification.
The Malaysian Palm Oil Board (MPOB) said that 2022 palm oil prices will average at 5,100 ringgit ($1,155.94) a tonne.
Palm oil ends flat, demand concerns weigh
In 2023, crude palm oil prices are expected to stabilise and average at 3,800 ringgit ($861.68) as supply improves, MPOB said.
Dalian’s most-active soyoil contract rose 1.1%, while its palm oil contract gained 2.8%. Soyoil prices on the Chicago Board of Trade slipped 0.6%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.