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Saturday, January 28, 2023

Palm oil ticks higher on short-covering ahead of long weekend

KUALA LUMPUR: Malaysian palm oil futures edged up on Monday after last week’s sharp drop, as traders covered short positions ahead of a long weekend, although gains were capped by concerns over weak January exports.

The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 7 ringgit, or 0.18%, to 3,852 ringgit ($893.11) a tonne, after falling 5.2% last week.

“The market has already priced in all the bad news from softening demand to the idea of halting exports to EU. Last week, the market was heavily battered amid fears of anaemic demand and aggressive selling from Indonesia,” said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.

Exports of Malaysian palm oil products for January 1-15 fell 36.4% to 401,749 tonnes from 631,401 tonnes shipped during December 1-15, independent inspection company AmSpec Agri Malaysia said.

Bursa Malaysia will be closed on Jan. 23 and 24 for the Chinese New Year holidays.

“We see potential emergence of short-covering or intensification of stock buildup by several refiners ahead of the holidays,” Paramalingam.

Top palm oil exporter Indonesia’s move to restrict shipments and boost domestic biodiesel consumption is set to squeeze global vegetable oil supplies that are already undercut by lower output in Southeast Asia and Latin America.

Dalian’s most-active soyoil contract gained 0.09%, while its palm oil contract slipped 0.13%. The Chicago Board of Trade was closed for a public holiday.

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

Palm oil ticks higher on short-covering ahead of long weekend

Source: Brecorder

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