Palmettos end higher due to better demand and likely lower production in June

The price of Malaysian palm oils futures rose on Wednesday. This ended two sessions of consecutive losses. Supported by higher demand, the rally in soya oil and the potential for lower production levels in June, they were boosted by higher prices, higher demand, higher soya oil prices, and heightened expectations of lower production.

The benchmark palm-oil contract for September delivery at Bursa Malaysia's Derivatives exchange gained 95 ringgit or 2.39% to 4,063 Ringgit ($961.4), a metric tonne, by the close.

"Overall, the market has improved. Demand has returned to normal." Our preliminary assessment of lower production in the month of June, coupled with the rallying soyoil prices, helped keep palm prices competitive, said Paramalingam Supramaniam at Selangor brokerage Pelindung Bestari.

India's palm oils imports reached an 11-month peak in June. This was due to lower domestic stocks and a discount on rival products like soyoil or sunflower oil, which encouraged refiners and retailers to increase purchases.

Dalian's palm oil contract, which is the most active contract, gained 1.52%. Chicago Board of Trade soyoil prices were 1.12% higher.

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

According to AmSpec Agri Malaysia (an independent inspection company), exports of Malaysian products containing palm oil rose by 4.3% in June compared to the previous month. Intertek Testing Services reported a 4.7% increase.

The statistics bureau reported that Indonesian crude palm oil and refined palm oils exports increased by 53% from a year earlier in May. This was because the tropical oil began trading at a lower price than its competitors, which boosted demand from major buyers.

The palm ringgit's trade currency, the dollar, fell by 0.71%, making the commodity more affordable for buyers who hold foreign currencies.

(source: Reuters)