Palm prices rise on concerns about supply, but weak demand limits gains
On Thursday, the price of Malaysian palm oils reversed its losses to increase on concerns about supply and strength in Chicago soybean oil. However, weak demand limited gains.
After falling for two sessions in a row, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange rose 40 ringgit or 0.91% to 4,453 Ringgit ($1,055.46) per metric ton.
Paramalingam Supramaniam is the director of Selangor brokerage Pelindung Bestari. He said that "the much-anticipated rise in third-quarter output was not there."
Malaysian palm oil stocks reached a 20-month-high at the end of August due to an increase in production and a small drop in exports. This was according to data released by the Malaysian Palm Oil Board. The Malaysian Palm Oil Board reported that palm oil production in July and august was 1.87 % lower than the same period of last year.
The exports of palm oil products from Malaysia in the period September 1-10 fell between 1.2% to 8.4% compared with the same period last month, Intertek Testing Services cargo surveyor and AmSpec Agri Malaysia inspection firm said on Wednesday.
Supramaniam stated that the market still needs demand.
Dalian's soyoil contract that is most active gained 0.17% while palm oil contract fell 0.11%. Chicago Board of Trade Soyoil Prices rose by 0.55%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Palm oil could retest its support at 4,381 Ringgit per metric tonne. A break below this level would open the door to 4,343 Ringgit.
(source: Reuters)