Palm prices rise on Mideast unrest and weak supply outlook
Malaysian palm oil futures rose more than 1% after the previous session. Prices were supported by the uncertainty surrounding the Middle East conflict and expectations of a drop in March production.
By midday, the benchmark contract for palm oil delivery in June on the Bursa Derivatives exchange had gained 65 ringgit or 1.36% to 4,834 Ringgit ($1,199.50).
Palm oil traders are unsure about the future of negotiations. Washington and Tehran have sent mixed signals, leaving them unsure if the Middle East conflict will escalate or ease.
Supramaniam stated that the production figures only show a marginal increase, which indicates a March-end stock of approximately 2 million to 2,2 million tons. This?level is what underpins the markets as the output trend slowly but steadily lowers.
On April 10, the Malaysian Palm Oil Board is expected release its March demand and supply figures.
Dalian's palm oil contract, which is the most active contract, fell by 0.28% while soyoil prices dropped 0.27%. Chicago Board of Trade soyoil prices rose 1.4%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price movement of edible oils.
Oil rose more than $5 per barrel as U.S. president?Donald Trump stated that the U.S. will continue to attack Iran but did not commit to a timeline for ending the war. This stoked investor fears of sustained supply disruptions.
Palm oil is less appealing as a biodiesel feedstock due to weak crude oil futures.
The palm?ringgit's currency has weakened by 0.15% in relation to the dollar. This makes the commodity slightly more affordable for buyers holding foreign currencies.
Indonesia's Palm Oil Association?said that biodiesel demand is expected to reach 15 million metric tonnes this year. This represents a 2 million-ton increase year-over-year after incorporating the B50 palm-oil-based biodiesel program. Reporting by Ashley Tang, Editing by Sumana Niandy. $1 = 4,300 ringgit.
(source: Reuters)
