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Wednesday, February 28, 2024

Palm oil rises on demand, Indonesia’s move to keep exports flexible

MUMBAI: Malaysian palm oil futures rose on Thursday on improvement in demand from China and as top producer Indonesia clarified that it would not make exports mandatory via a new exchange, alleviating concerns about supply pressures.

The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 86 ringgit, or 2.42%, to close at 3,637 ringgit ($772.19) per metric ton.

Earlier this week, it fell to the lowest level since June 23 at 3,520 ringgit.

Indonesia will launch its crude palm oil (CPO) futures exchange on Friday, but it will not make trading via the exchange mandatory, its chief regulator told Reuters on Wednesday.

Authorities in the Southeast Asian country had previously planned to make it mandatory for all CPO exports to go through the exchange, in order to drive global palm oil prices and create benchmarks similar to those in Kuala Lumpur and Rotterdam.

Palm sheds early gains to end near 3-1/2-month low as inventories weigh

“Anticipating that Jakarta would make exports mandatory, Indonesian sellers were in a hurry to clear inventories. However, now, sales are unlikely to be aggressive, which would lend support to prices,” said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage.

Improvement in demand from China and bargain buying also helped futures to recover from their lowest level in three-and-a-half months, he said.

Exports of Malaysian palm oil products for Oct. 1-10 rose 12.5% to 29.6% from a month earlier, data from cargo surveyors showed.

The gains in palm oil were capped by the softness in soyoil futures and the availability of sunflower oil supplies at very competitive prices, a New-Delhi based trader said.

Soyoil futures on the Chicago Board of Trade were down 0.23%, as of 1017 GMT.

A flood of cheap sunflower oil from Russia and Ukraine is putting downward pressure on palm oil prices as the two top producers take advantage of currency depreciation to grab a larger share of the edible oils market.

Malaysia’s palm oil stocks at September-end rose 9.6% to hit an 11-month high of 2.31 million tons, data from the Malaysian Palm Oil Board (MPOB) showed on Tuesday.

Palm oil rises on demand, Indonesia’s move to keep exports flexible

Source: Brecorder

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