JAKARTA: Malaysian palm oil futures rose for a third straight session on Thursday, lifted by expectations of sluggish production in Malaysia amid a labour crunch and Indonesia’s slow-paced exports resumption.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 1.71% to 6,465 ringgit ($1,473.00) a tonne, its highest closing in a week.
“Malaysian palm oil prices are drawing support from the Indonesian controlled palm oil export policy mechanism, and anticipation of a drawdown in Malaysian palm oil May end stocks due to higher exports and lower production,” said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The Malaysian Palm Oil Council, a state-run agency, lowered its production outlook on Wednesday for the world’s second-largest producer and pegged prices to remain above 6,000 ringgit a tonne this year.
Meanwhile, the world’s top palm oil producer Indonesia issued export permits for 179,464 tonnes of palm oil as of June 2, a senior trade ministry official said on Thursday, after a ban on shipments was lifted last week.
Indonesia also cancelled a plan to send its citizens to work in palm oil plantations in neighbouring Malaysia, which is facing a labour shortage. Palm was also supported by firmer rival edible oils and a report that Malaysia will remain committed to implementing its biofuel policy and mandate, a trader in Kuala Lumpur said.
Dalian’s most-active soyoil contract was up 0.65%, while its palm oil contract rose 2.01%. Soyoil prices on the Chicago Board of Trade were down 0.14%.
Palm oil looks neutral in a range of 6,220-6,423 ringgit per tonne, and an escape could suggest a direction, Reuters technical analyst Wang Tao said.
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