Palm prices rebound on the back of bargain-buying and strong export demand
The price of Malaysian palm oils futures increased on Tuesday, after two sessions of declines. This was due to bargain hunting and data from cargo surveyors showing robust exports in the last month.
By midday, the benchmark palm oil contract on Bursa Derivatives Exchange for November delivery had gained 64 ringgit (1.46%) to 4,444 Ringgit ($1,056.84 per metric tonne). The contract dropped 2.41% over the last two sessions. Monday was a holiday and the market was closed.
After last week's drop, crude palm oil futures rose on bargain buying. Strong exports have also helped to lift market sentiment. David Ng is a proprietary trader with Kuala Lumpur based trading firm Iceberg X Sdn. Bhd.
Intertek Testing Services, a cargo surveyor, estimated that Malaysian palm oil exports rose 10.2% on a monthly basis in August. AmSpec Agri Malaysia will release its August export estimate later today.
Dalian's palm oil contract grew by 0.99%, while the most active soyoil contract increased by 0.14%. Chicago Board of Trade soyoil prices were up by 0.08%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
As concerns about disruptions in supply grew, oil prices increased. This was due to an escalation in the conflict between Russia & Ukraine.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency, the dollar, has weakened by 0.19%, making it slightly cheaper for foreign currency buyers.
From January to July 2013, Indonesia exported 13,64 million tons crude and refined palm oils, an increase of 10.95% on a year-on-year basis.
Technical analyst Wang Tao stated that palm oil could bounce back to 4,509 Ringgit per ton as wave C, from 4,568 Ringgit, may have finished.
(source: Reuters)
