Palm oil's output data and rival oils' gains lead to a higher end for the palm oil

The price of Malaysian palm oils futures rose for the second time in a row on Tuesday. This was due to a strong rise in the prices of rival edible oils traded at Dalian, as well as a good export and lower production figures. The benchmark April palm oil contract on the Bursa Derivatives Exchange rose 33 ringgit or 0.78% to 4,258 Ringgit ($1,077.97).

A Kuala Lumpur based trader stated that the market was tracking Dalian's strength, its good export and a lower production to sustain its rally. Dalian's palm oil contract increased by 2.67%, while the?most active soyoil contract grew 1.03%. Chicago Board of Trade soyoil prices rose by 0.48%.

Palm oil tracks the price movements of competing edible oils as it competes to gain a share in the global vegetable oils markets. Intertek Testing Services, a cargo surveyor, reported that Malaysian palm oil exports from January 1-25 were up 9.97% when compared to a month ago. AmSpec Agri Malaysia, an independent inspection company also reported an increase of 7.97%.

The ringgit (the currency used to trade palms) strengthened by 0.33% in relation to the dollar. This made the 'commodity' more expensive for foreign currency buyers.

Oil prices

Edged down

Investors kept an eye on a possible resumption of supply from Kazakhstan. However, price drops were not as significant as they could have been due to a winter storm that hit the U.S. Gulf Coast refineries and affected crude production.

Palm oil is less appealing as a biodiesel feedstock because crude oil futures are weaker.

(source: Reuters)