KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday to snap a two-day decline, buoyed by stronger rival Dalian and Chicago contracts and higher export estimates.
The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed 1.34% higher at 3,926 ringgit ($839.97) a metric ton.
The contract was seen trading sharply higher following a recovery in Chicago soyoil futures and strong Malaysian palm oil exports for July, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
The market is expected to test the 4,000 ringgit mark again, a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract ticked up 0.05%, while its palm oil contract gained 1.45%. Soyoil prices on the Chicago Board of Trade were up 0.94%.
Palm oil is affected by price movements in related oils as they compete for a share of the global vegetable oils market.
Exports of Malaysian palm oil products for July 1-15 rose between 65.9% and 75.6% from a month earlier, according to cargo surveyors Intertek Testing Services and AmSpec Agri.
Cargo surveyor Societe Generale de Surveillance estimates exports of Malaysian palm oil products for July 1-15 at 786,830 tons, from 488,388 tons shipped during June 1-15, according to LSEG.
Oil prices dipped on Tuesday on worries of a slowing Chinese economy crimping demand and despite a growing consensus the US Federal Reserve could begin cutting its key interest rate as soon as September.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Malaysia’s benchmark crude palm oil futures are expected to average between 3,850 ringgit and 4,000 ringgit per ton this year, a slight increase from 2023, the Malaysian Palm Oil Association said on Monday.
The ringgit, palm’s currency of trade, weakened 0.09% against the dollar, making the commodity less expensive for buyers holding foreign currencies.
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