VEGOILS-Palm ends higher despite weak India demand, soyoil competition

Malaysian palm futures closed higher on Thursday, reversing previous losses despite a weaker demand from India and increasing pressure from cheaper soyoil.

At the close, the benchmark palm oil contract on Bursa Derivatives Exchange for January delivery was up 6 Ringgit or 0.13% at 4,518 Ringgit ($1,069.35).

According to Paramalingam Supramaniam of brokerage Pelindung Bestari, the market fell after news that India's imports of palm oil had fallen to a four month low. Meanwhile, cheaper soybeans, and soybean oil, squeezed demand for Palm Oil.

The Solvent Extractors' Association of India reported that India's palm oils imports dropped in September to their lowest level since May, as refiners switched to soyoil which is cheaper and whose shipments reached a three-year high.

Dalian's palm oil contract, which is the most active contract in Dalian, fell 0.04%. Chicago Board of Trade soyoil prices were up by 0.47%.

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 were also stable, as traders prepared themselves for the possibility of India ceasing its imports of Russian oil, which would increase demand for oil from other sources.

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% in relation to the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies. ($1 = 4.2250 ringgit)

(source: Reuters)