Palm prices rise more than 1% on demand for the festive season

Malaysian palm futures rose by more than 1% on Wednesday to a seven week?high, as the market grew in anticipation of a stronger demand during the Lunar New Year holidays. The benchmark 'palm oil' contract for April delivery at the Bursa Derivatives exchange gained 60 ringgit or 1.47% to 4,154 Ringgit ($1,026.69) per metric ton. This is the highest close on the Bursa since December 2.

David Ng, an Iceberg X Sdn Bhd proprietary trader in Kuala Lumpur, stated that crude palm oil futures were trading higher due to expectations of a strong demand?in the weeks ahead of next month's Lunar New Year holiday season. Cargo surveyors estimate that exports of Malaysian products containing palm oil for the period January 1-20 rose between 8.64% and 11,4% on a month-to-month basis. Dalian's soyoil contract, which is the most active contract in Dalian, firmed up by 0.25%. Its palm oil contract increased by 1.28%. Chicago Board of Trade soyoil prices were up by 0.61%.

As palm oil competes to gain a share in the global vegetable oil market, it tracks the price fluctuations of competing edible oils.

Oil prices dropped as the expected increase in U.S. crude stocks outweighed a temporary stoppage of production at two large Kazakh fields and the geopolitical pressure from U.S. tariff threats over its bid to control?Greenland.

Palm oil is less appealing as a biodiesel source due to weaker crude oil futures. The ringgit is palm's currency of trade and it has strengthened by 0.2% against the US dollar. This makes the commodity slightly more expensive for buyers who hold foreign currencies. The Malaysian Palm Oil Council stated that palm oil prices are expected to be rangebound in February between 4,000 and 4,300 Ringgit ($987 to $1061) per ton due to seasonal decreases in production and stock.

(source: Reuters)