Palm prices rise on Mideast unrest and weak supply outlook
Malaysian palm futures rose a day after falling in the previous session. This was boosted by the uncertainty surrounding the Middle East conflict and the expectation of a fall in March's output.
The benchmark palm oil contract on Bursa Derivatives Exchange for June delivery gained 25 ringgit or 0.52% to 4,794 Ringgit ($1,187.81).
According to Paramalingam Supramaniam of Selangor brokerage Pelindung Bestari, the palm oil market is still uneasy due to ongoing negotiations. Washington and Tehran have sent mixed signals, leaving traders uncertain whether Middle East conflict would?ease or escalate.
Supramaniam reported that the production figures only show a marginal increase, which indicates March-end stock levels of 2 to 2.2 million tons. This level is a key factor in the market's stability as the output trend continues to decline.
On April 10, the Malaysian Palm Oil Board will release its March demand and supply figures.
Dalian's palm oil contract, which is the most active contract, fell by 0.28%. Chicago Board of Trade soyoil prices rose 1.62%.
As palm oil competes to gain a share in the global vegetable oil market, it tracks the price movements of competing edible oils.
Oil prices rose?nearly 7 percent after President Donald Trump announced that the U.S. will continue its?attacks against?Iran. This stoked fears of prolonged disruptions in oil supply.
Palm oil is a better option for biodiesel because crude oil futures are stronger.
The palm ringgit's currency, the dollar, has weakened by 0.3%, making it slightly cheaper for buyers with foreign currencies.
The Indonesian palm oil association said that biodiesel demand is expected to rise by 2 million tons in 2015, when factoring the B50 biodiesel based on palm oil. Reporting by Ashley Tang, Editing by Sumana Nandy, and Ronojoy Mazumdar.
(source: Reuters)
