Malaysian palm oil futures rose on Thursday after the second largest palm producer announced a long-awaited economic stimulus package to counter the impact of the coronavirus outbreak.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange closed to trade up 41 ringgit, or 1.69%, to 2,460 ringgit ($580.87).
Palm oil prices have lost 6.2% so far this week on worries about a slump in edible oil demand as the number of new cases of infection outside China spiked.
To counter the economic impact of the virus, Malaysia's interim prime minister Mahathir Mohamad on Thursday announced a 20 billion ringgit ($4.7 billion) stimulus package which includes tax breaks and rescheduling of loans for affected companies, and cash aid for some.
"The stimulus package had nothing specific for palm, but the market rose at the back of gains in Bursa Malaysia," Sathia Varqa, owner and co-founder of Singapore-based Palm Oil Analytics.
"The palm market will now be focussed on the extent of production rise in February, drop in exports and the subsequent rise in stocks," he added.
Dalian's most-active soyaoil contract traded up 0.17%, while its palm oil contract fell 0.73%. Soyaoil prices on the Chicago Board of Trade gained 0.54%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
The ringgit, palm's currency of trade, gained 0.31% against the dollar, making the edible oil more expensive for holders of foreign currency.
Comments
Comments are closed for this article.