KUALA LUMPUR: Malaysian palm oil futures rose in early trade on Tuesday, gaining over 1 percent at the midday break, tracking related edible oils and supported by improving export demand.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 1.4 percent to 2,539 ringgit ($630.81) a tonne at the midday break. It earlier hit 2,540 ringgit, its highest level since Dec. 27.
Trading volumes were thin at 9,758 lots of 25 tonnes each.
“Hefty gains in Dalian and soybean oil may lend support and uplift palm futures market sentiment,” said a Kuala Lumpur-based trader, referring to overnight soyoil on the Chicago Board of Trade and related edible oils on China’s Dalian Commodity Exchange.
The market is also reacting to strong exports, said another trader in Kuala Lumpur.
Palm oil shipments from Malaysia, the world’s second largest producer after Indonesia, gained 6.7 percent on-month in December on stronger demand from Europe and India, according to data from cargo surveyor Intertek Testing Services (ITS).
The market is also forecasting gains in demand from key consumer China, as it stocks up ahead of the Lunar New Year celebrations when palm oil consumption is higher for cooking purposes.
In other related oils, the March soybean oil contract on the Chicago Board of Trade saw strong overnight gains of 1.7 percent on Friday before closing for public holidays.
US markets were closed on Monday for the New Year’s Day holiday. Trade in CBOT grains will resume Tuesday at 8:30 a.m. CST (1430 GMT).
The May soybean oil on the Dalian Commodity Exchange rose 2.1 percent, while the Dalian January palm oil contract was up 1.5 percent.
Palm oil prices track the performances of other edible oils, as they compete for a share in the global vegetable oils market.
Source: Brecorder.com
