Palm oil prices rise on bargain-buying and improved export prospects
The price of Malaysian palm oil futures increased on Tuesday, as traders expected improved export figures for the first half-of-August.
At midday, the benchmark palm oil contract on Bursa Derivatives exchange for October delivery was up 71 Ringgit or 1.7% at 4,258 Ringgit ($1,007.81). The contract dropped 1.37% during the previous session.
A Kuala Lumpur-based dealer said that bargain buying helped to support prices in all sectors, while Dalian palm oil recovered from its lows of yesterday.
The trader said that the market would also look for an improvement in export numbers in the first half August.
Dalian's palm oil contract, which is the most active contract in Dalian, rose by 1.72% while soyoil prices increased by 0.92%. Chicago Board of Trade soyoil prices were down by 0.09%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils.
Five dealers reported that India's imports of palm oil fell in July due to contract cancellations. However, soyoil exports to India surged at a three-year peak, thanks to low prices and deliveries from June.
A survey shows that Malaysian palm oil inventories will rise for the fifth consecutive month, reaching their highest level in nearly two years. Production growth is outpacing exports.
After three days of declines, oil prices remained flat as concerns about oversupply weighed heavily on the market after OPEC+ agreed to a significant increase in output for September. The market was supported by the possibility of further Russian supply disruptions.
Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures.
The palm ringgit's trade currency strengthened by 0.24% against dollars, making it slightly more expensive to buyers who hold foreign currencies.
Technical analyst Wang Tao stated that palm oil could bounce up to 4,273 Ringgit per metric tonne as it has broken through resistance at 4,211 Ringgit.
(source: Reuters)
