Palm oil prices rise on stronger export data and bargain buying

Malaysian palm futures rose on Monday as a result of stronger export data, bargain-buying, and higher crude oil prices.

By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for March delivery had gained 58 Ringgit (1.49%) to $3,963 Ringgit ($972.04 per metric ton).

Intertek Testing Services, a cargo surveyor, estimated that the exports of Malaysian 'palm oil products' for December 1-20 were up 2.4% compared to a month ago. AmSpec 'Agri Malaysia is expected to release its export estimates later today.

Anilkumar Bagani of Sunvin Group in Mumbai, the head of commodity research, explained that prices rose due to bargain-buying, stable Dalian and Chicago futures and an increase in energy prices.

Dalian's palm oil contract, which is the most active contract, fell 0.36% while soyoil prices rose 0.03%. Chicago Board of Trade soyoil prices were up 0.5%.

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

Oil prices increased after officials announced that the U.S. intercepted a tanker off the coast of Venezuela in international waters, causing new supply uncertainty.

Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.

The palm ringgit's currency, the dollar, has weakened by 0.07%, making it slightly cheaper for buyers with foreign currencies.

Technical analyst Wang Tao stated that palm?oil could test support at 3,885 Ringgit per ton. A break below this level would trigger a drop to 3,832 Ringgit.

(source: Reuters)