NEW DELHI: Malaysian palm oil futures ended slightly higher on Monday, extending gains from the previous session, as the market tracked strength in Chicago soyoil prices.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange gained 0.03% to close at 3,741 ringgit ($799.36). “Palm oil demand is a bit weak and gains were capped because of that reason,” said a Mumbai-based trader.
Exports of Malaysian palm oil products for Dec. 1-10 fell to 368,990 metric tons from 398,375 tons shipped in the Nov. 1-10 period, cargo surveyor Intertek Testing Services said on Sunday.
Demand for palm oil normally drops in winter as lower temperatures solidify the oil, making it difficult for consumers to use. Soyoil prices on the Chicago Board of Trade rose 0.2%. Indonesia, the world’s largest palm oil producer, will continue its mandatory 35% biodiesel blending in 2024 and has allocated 13.41 million kilolitres of biodiesel for next year, slightly higher than the 13.15 million kilolitres allotted for 2023.
Palm oil is used as feedstock to make biodiesel. Palm oil may test a support zone of 3,707-3,714 ringgit per ton, following its failure to break resistance at 3,781 ringgit, Reuters technical analyst Wang Tao said.
Oil prices held steady on Monday as US efforts to replenish strategic reserves provided support, though concerns persist about oversupply and softer fuel demand growth next year.
Shares limped lower on Monday in a week packed with a quintet of rich world central bank meetings and data on US inflation that could make or break market hopes for a rapid-fire round of rate cuts early next year.
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