Palm extends gains due to good export prospects, soyoil

The price of palm oil in Malaysia rose Tuesday, as traders benefited from the positive outlook for exports and the stronger soyoil market at Dalian and Chicago.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery had gained 43 ringgit or 0.95% to 4,556 Ringgit ($1,078.60).

The futures opened higher on Monday, after a bullish trend in the soyoil markets in South America and North America and a promising performance of palm oil exports from Malaysia between October 1-20, said Anilkumar bagani, head of research at Sunvin Group in Mumbai, a vegetable oil brokerage.

Dalian's palm oil contract grew 0.09%, while the most active soyoil contract increased 0.22%. Chicago Board of Trade soyoil prices were up by 0.1%.

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

Intertek Testing Services, a cargo surveyor, said that exports of Malaysian products containing palm oil for October 1-20 increased 3.4%, to 1,044,784 tons, from the 1,010,032 tons exported during September 1-20.

Chicago Board of Trade Soybean futures reached their highest level for a month Monday, on renewed optimism about U.S. China trade talks.

In the face of uncertain palm and soy oil exports, the Malaysian Palm Oil Council stated on Tuesday that crude palm oils prices will remain above 4,400 Ringgit ($1,042) a metric ton in 2026.

The dollar and the ringgit, which is palm's trade currency, were trading at parity. If the ringgit were to weaken, it would reduce the price of palm oil for foreign currency buyers.

Technical analyst Wang Tao stated that palm oil could test support at 4,484 Ringgit per metric tonne. A break below this level would open the door to 4,456 Ringgit.

(source: Reuters)