Palm oil prices rise on the strength of rival oils and positive export data
The price of Malaysian palm oils futures increased for the second session in a row on Tuesday, supported by higher rival oils and positive cargo export data.
By midday, the benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange for March delivery had gained 41 ringgit or 1% to 4,131 Ringgit ($1,018.99).
A Kuala Lumpur based trader said that the price of crude palm oil is rising, supported by gains made in other oilseeds.
The trader stated that the contract was trading at well over 4,100 ringgit based on technical support data and export data from January 1-10.
Exports of Malaysian Palm Oil Products for the period January 1-10 increased between 17.7% to 29.2% compared to a month ago, according cargo surveyors.
A senior Indonesian official has said that the price difference between crude palm oil and crude oil will determine whether or not Indonesia launches its B50 mandate for biodiesel, which blends 50% palm-oil based fuel with Diesel.
Dalian's palm oil contract, which is the most active contract in Dalian, increased by 1.62%. Chicago Board of Trade soyoil prices were up by 0.62%.
As palm oil competes to gain a share in the global vegetable oils market, it tracks price changes of competing edible oils.
The price of oil edged up as concerns about Iran and possible supply disruptions overshadowed the possibility of an increase in crude supply from Venezuela.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
Malaysian palm oil inventories soared to a near-seven-year high in December, surpassing the psychologically significant 3 million-ton mark, as the strongest monthly production in eight years eclipsed a modest rebound in exports.
The palm ringgit's currency has strengthened by 0.15% against dollars, making it slightly more expensive for buyers with foreign currencies.
Technical analyst Wang Tao stated that palm oil could rise to 4,180 ringgit a ton as it has already surpassed a major resistance level of 4,099 ringgit.
(source: Reuters)
