Palm oil prices rise on the back of reduced production, but soyoil remains firm
The price of Malaysian palm oils futures rose on Tuesday after two sessions of declines. This was due to expectations of a lower palm production, and higher soyoil.
At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for December delivery gained 35 ringgit or 0.79% to 4,472 Ringgit ($1,061.73) per metric ton. The contract dropped 0.20% over the last two sessions.
David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn. Bhd. He said that crude palm oil futures were higher due to expectations of a weaker output in the upcoming weeks.
The market sentiment was also lifted by higher soybean oil prices in the Asian hours. Ng stated that prices are supported above 4,400 Ringgit and have resistance at 4,580 Ringgit.
According to a survey, Malaysian palm oil production and stocks are expected to fall in September for first time in seven months.
On October 10, the Malaysian Palm Oil Board will release its September demand and supply data.
The Chicago Board of Trade saw a rise of 0.46% in soyoil. Dalian Commodity Exchange will be closed on October 1-8 due to public holidays.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.
Oil prices were steady as investors assessed a smaller-than-expected November output hike by OPEC+ against the backdrop of oversupply expectations.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
According to two official gazette resolutions, the Argentinean government has raised the biofuel price for the domestic market.
The dollar has strengthened by 0.02%, which makes palm slightly more expensive for foreign currency buyers. The dollar is equal to 4.2120 ringgits. (Reporting and editing by Ashley Tang, Eileen Soreng, Vijay Kishore and Rashmi Soreng)
(source: Reuters)
