Palm climbs in second session due to strong exports and Indonesia biodiesel mandate

Malaysian palm futures closed higher for the second session in a row on Monday, as data from cargo surveyors showed robust exports. Indonesia's mandatory biodiesel blend also helped to boost investor sentiment.

The benchmark palm-oil contract for September delivery at the 'Bursa Malaysia Derivatives exchange gained?21 Ringgit or 0.46% to 4,589 Ringgit ($1,128.91).

Paramalingam Supramaniam is the director of brokerage Pelindung Bestari. He said that the strong June exports supported the market and Indonesia's mandatory inclusion policy under B50 mandates strengthened it even further.

Indonesia will launch its B50 Biodiesel Programme, which blends 50% palm oil-based B50 with 50% conventional diesel on July 1.

Exports of Malaysian Palm Oil Products 'during the period June 1 to 25 increased between 10.6% and 11,1% over a previous month, according to cargo surveyors. On Tuesday, they are expected to publish?their estimated figures for the entire month.

"Production is recovering faster than expected in Peninsular Malaysia, but East Malaysia still has lower output. Supramaniam stated that the weather conditions are still benign and will likely remain this way until the third quarter.

Supramaniam said that he also expects the prices to remain range-bound at least until the Malaysian Palm Oil Board report is released on July 10.

Dalian's most-active palm oil contract increased by 1.26%, while the soyoil contract grew 0.65%. Chicago Board of Trade soyoil prices were up by 0.49%.

As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.

Middle East producers continued to load oil and liquefied gas despite recent ship attacks.

Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.

The palm ringgit's currency has strengthened by 0.44% compared to the dollar. This makes the product more expensive for foreign buyers. ($1 = 4.0650 ?ringgit)

1 Please enter the freight rate from Peninsula Malaysia/Sumatra, and then press Enter, or click twice between the brackets. Double-clicking on the bracketed codes will allow terminal users to see edible oil prices in cash and futures. To move forward in the chain, press F12. To go back, hit F11. 1

(source: Reuters)