Palm rises on hopes of higher exports, recovery in other commodities

KUALA LUMPUR: Malaysian palm oil futures ended higher on Tuesday, helped by expectations of importers stocking up on the commodity in case of further coronavirus-led lockdowns and a recovery in prices of rival oils.

The benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange climbed 2.88pc to 2,359 ringgit ($552.01) a tonne.

"There are expectations for exports to stay firm in the view that China and India may stock up in case a second wave of the coronavirus outbreak leads to lockdowns again," a Kuala Lumpur-based trader said.

Fears of a resurgence of infections have been pressuring crude oil and global markets, although oil prices rose on Tuesday as the International Energy Agency (IEA) increased its oil demand forecast for 2020, and as record supply cuts supported.

Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.

Strong export numbers and outlook coupled with supportive Dalian and CBOT markets were also lifting sentiment, the trader said.

Malaysia's palm oil exports for June 1 to 15 spiked by around 83pc from May, cargo surveyors reported on Monday.

Dalian's most-active soyoil contract gained 0.39pc and its palm oil contract rose 1.46pc. Soyoil prices on the Chicago Board of Trade climbed 1.33pc.

Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.