Palm oil posts biggest gain in about 3 weeks on stronger rival oils

JAKARTA: Malaysian palm oil futures rebounded on Thursday, posting their biggest gain in nearly three weeks, as rival vegetable oils in Dalian and Chicago strengthened and a weaker ringgit supported the market.

The benchmark palm oil contract for May delivery rose 3.19% to close the afternoon trade at 4,070 ringgit ($924.58) per tonne, its best since Jan. 27.

“Prices moved up on the back of strong closing in Chicago soybean oil last night as NOPA released lower crushing,” a Kuala Lumpur-based trader said.

The US soybean crush in January were smaller than expected despite rising for the first time in three months, while soyoil stocks increased for a fourth straight month.

Palm is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Dalian’s most-active soyoil contract gained 0.97% while its palm oil contract rose 0.89%.

Soyoil prices on the Chicago Board of Trade eased 0.1% during Asia afternoon hours after hitting their best level in two weeks earlier in the day.

Exports of Malaysian palm oil products for Feb. 1-15 rose 8.9% from a month earlier, independent inspection company AmSpec Agri Malaysia said on Wednesday, while cargo surveyor Intertek Testing Services reported an increase of 18.4%.

Cargo surveyor Societe Generale de Surveillance said on Thursday reported that exports dropped 0.9% in Feb. 1-15.

Higher export tax and export levy for Indonesian palm oil exports in Feb. 16-28 period would also benefiting Malaysian palm oil exporters, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

The biggest palm oil exporter Indonesia set its crude palm oil reference price at $880.03 per tonne for Feb. 16-28, which put CPO export tax at $74 per tonne and export levy at $95 per tonne, higher than the imposed tax and levy in first half of February.