Palm prices rise on the back of exports but Middle East unrest caps gains
The price of Malaysian palm oils futures increased slightly on Wednesday. This was a slight recovery from the previous session. Expectations of strong export numbers supported the market while uncertainty about the Middle East conflict limited the gains.
At midday, the benchmark palm oil contract on Bursa Derivatives Exchange for September delivery gained 12 ringgit (0.3%), to $3,995 ringgit (USD $943.11) per metric ton.
The market was jittery because of uncertainty about the Middle East conflict. Paramalingam Supramaniam is the director at Selangor brokerage Pelindung Bestari.
He added that "the production is gradually improving, and an overall improvement should be seen in the third-quarter."
Later in the day, export estimates for Malaysian palm oils products are expected.
Dalian's palm oil contract, which is the most active contract in Dalian, lost 0.48%. The Chicago Board of Trade's (CBOT), soyoil price rose by 0.84%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils.
Oil prices rose, offering some relief after plunging in the previous two sessions as investors evaluated the stability of the ceasefire between Iran & Israel.
Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger.
The palm ringgit's trade currency strengthened by 0.09% against dollars, making it slightly more expensive to buyers who hold foreign currencies.
Data published by the European Commission shows that the imports of soybeans into the European Union for the 2024-25 seasons, which began in July last year, reached 13,79 million metric tonnes by June 22 compared to 12,89 million tons a year ago.
EU palm oil imports were 2.76 million metric tons for the same time period, compared to 41 million metric tons a year ago.
Technical analyst Wang Tao stated that palm oil could break support at 3,978 ringgit a metric ton, and fall towards 3,538 ringgit.
(source: Reuters)
