SINGAPORE: Malaysian palm oil futures rose on Thursday, after a four-session losing streak, underpinned by robust demand from key buyer India and higher crude oil prices.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 15 ringgit, or 0.4%, to 3,636 ringgit ($784.13) a metric ton at the midday break.
Indonesia recorded domestic sales obligation realisation of 3.26 million metric tons in 2023, which translated into 25.2 million tons in export permits, Trade Ministry official Syailendra said.
India’s palm oil imports in December rose to their highest in four months as purchases of refined palmolein surged because of competitive prices, five dealers told Reuters on Wednesday.
Oil prices rose in early trade on Thursday, extending the previous day’s sharp gains on concerns about Middle Eastern supply. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
Dalian’s most-active soyoil contract and its palm oil contract were both down 0.5%. Soyoil prices on the Chicago Board of Trade slipped 0.3%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Hot, dry weather prompted analysts to slash their production estimates for Northern Brazil, the largest soybean producer, but rains this week are likely to benefit crops and improve estimates.
Palm oil extends losses on soft demand
Higher supply from other South American producers, such as Argentina, is also likely to offset any crop losses in Brazil.
The Malaysian ringgit, palm’s currency of trade, weakened 0.2% against the dollar. A weaker ringgit makes palm oil more attractive for foreign currency holders.
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