Palm oil gains as traders see lower May output
- The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 31 ringgit, or 1.36pc, to 2,316 ringgit ($539.86) by the midday break.
- "Malaysia May palm oil exports is estimated in the range of 1.25-1.26 million
KUALA LUMPUR: Malaysian palm oil futures rose on Tuesday as traders bet on lower May production amid improving exports, but weaker rival soyoil and concerns over growing Sino-U.S. tensions capped the gains.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 31 ringgit, or 1.36pc, to 2,316 ringgit ($539.86) by the midday break.
The market is now awaiting the release of the Malaysian Palm Oil Association's May production data and is expecting a decline from previous estimates of an 11pc monthly rise, said Anilkumar Bagani, research head of Sunvin Group, a Mumbai-based vegetable oil broker.
Exports in the world's second largest palm producer rose between 7pc and 8.4pc in May from the month before.
"Malaysia May palm oil exports is estimated in the range of 1.25-1.26 million tonnes.... the production numbers now hold key for end-May palm oil inventories," Bagani said.
India's vegetable oil imports in June could rise to 1.14 million tonnes, up from an average of 865,000 tonnes during April-May, as New Delhi eases coronavirus curbs, the Indian Vegetable Oils Producers' Association (IVPA) said.
State-owned Chinese firms bought at least three cargoes of U.S. soybeans on Monday, even as sources in China said the government had told them to halt purchases after Washington said it would eliminate special treatment for Hong Kong to punish Beijing.
Dalian's most-active soyoil contract fell 0.14pc, while its palm oil contract gained 0.71pc. Soyoil prices on the Chicago Board of Trade were also trading down 0.07pc.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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