Palm prices rise on the back of reduced production and improved exports
The price of palm oil futures in Malaysia rose on Tuesday, as traders anticipated a sharp drop in production and stronger demand for exports.
By midday, the benchmark palm oil contract for April delivery at the Bursa Malaysia Derivatives Exchange had gained 37 ringgit (0.91%) to 4,104 Ringgit ($1,013.33) per metric ton.
Exports are up significantly and traders expect a drop in output of between 15% and 17%, which is a strong demand signal, said Paramalingam Supramaniam at Selangor brokerage Pelindung Bestari.
He said that if these two variables continue up until March, the end stock could drop significantly.
Later in the day, cargo?surveyors are expected to release their estimates of exports for January 1-20.
Dalian's soyoil contract, which is the most active in Dalian, rose by?0.4% while palm oil contracts increased by 1.18%. Prices of soyoil on the Chicago Board of Trade rose by 0.29%.
As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils.
Oil prices increased after China's economic growth exceeded expectations, and markets watched President Donald Trump's threat of increasing?U.S. Trump threatened to increase tariffs against European nations because he wanted to buy Greenland.
Palm oil is a better option as a feedstock for biodiesel due to the stronger crude oil futures.
The palm ringgit's currency has strengthened by 0.05% versus the dollar. This makes the product slightly more expensive to buyers who hold foreign currencies.
A poll shows that Malaysian crude palm futures prices are likely to be slightly lower in 2026 compared to last year. This is due to a stronger supply from major producers, and a subdued demand for biofuel.
Technical analyst Wang Tao stated that palm oil could test resistance at the price of 4,108 ringgit for a metric ton. A break above this level would lead to gains in the range between 4,125 and 4,149 ringgit.
(source: Reuters)
