Palm oil rises for a third session and follows rivals who are firmer, while crude is higher

The price of Malaysian palm oils futures rose for the third time on Tuesday. This was due to the rise in crude oil prices and gains in rival edible oils traded in Dalian and Chicago, as well as the rising 'crude' oil prices. However, weak export data limited the upside.

By 0250 GMT, the benchmark palm oil contract on Bursa Malaysia's Derivatives Exchange for May delivery had gained 4 ringgit (0.1%), or $4151 ringgit (1,057.31) per metric ton.

The session began with the contract reaching its highest level in over three weeks.

A Kuala Lumpur based trader stated that "Bursa Malaysia's CPO future opened higher, tracking firmer prices spreads among competing oilseeds." He added that the market participants are waiting for data on production from Malaysian Palm Oil Association to provide further direction.

Dalian's palm oil contract, which is the most active contract, grew 1.27% while soyoil gained 1.02%. Chicago Board of Trade Soy Oil gained?0.64%.

As palm oil 'competes' for a piece of the global vegetable oils market, it tracks the price movement of competing edible oils.

Five dealers report that India's imports of palm oil rose by 10.1% to reach a six-month record in February, due to the widening price discount compared to other oils. This led refiners and oil companies to increase purchases, while reducing imports.

According to data from Intertek Testing Services, a cargo surveyor and AmSpec Agri Malaysia, an independent inspection company, exports of Malaysian products containing palm oil declined by between 21.5%?and 25.5% in February.

Statistics?bureau data revealed that Indonesia exported 2,24 million tons of crude and refined palm oils in January, an increase of 77.07% on the previous year. The shipments were valued at $2.29billion.

The price of oil rose for a 3rd straight day as fears of a supply disruption from the Middle East region were heightened by the U.S. and Israeli confrontation over?Iran.

Palm oil is a more attractive feedstock for biodiesel due to the stronger crude oil futures.

Technical analyst Wang Tao stated that palm?oil could test a support level of?4,121 per metric ton. A break below this level would trigger a drop into the range 4,078-4.098 ringgit. ($1 = 3.9260 ringgit)

(source: Reuters)