Palm gains on strong export demand, higher soyoil prices

KUALA LUMPUR: Malaysian palm oil futures rose in early trade on Tuesday and were set for a second consecutive day of gains, helped by strong export data and firmer soyoil prices.

The benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange was up 0.9 percent at 2,530 ringgit ($584.84) a tonne by the midday break.

Traded volumes stood at 9,696 lots of 25 tonnes each at noon.

Palm had fallen for three consecutive weeks on expectations of rising output and weaker-than-expected export demand.

"The market was expecting exports to be unchanged (from the previous month) or even lower," said a Kuala Lumpur-based futures trader.

Palm oil export demand declined in early April, as per cargo surveyor data, despite the upcoming Muslim fasting month of Ramadan at end-May. The festival sees a higher usage of palm oil for cooking purposes, as Muslims end day-long fasts with communal feasting.

Shipments of the tropical oil however improved for the full month of April, rising 4.6 percent from March, according to Intertek Testing Services on Tuesday.

Stronger performing soyoil also lent support to palm prices, the trader added.

Palm oil prices track other related edible oils, as they compete for a share in the global vegetable oils market.

Soybean oil on the Chicago Board of Trade climbed as much as 0.4 percent, while the September soybean oil contract on the Dalian Commodity Exchange was up 1.2 percent.

In related vegetable oils, the September contract for palm olein gained 1.6 percent.

Palm oil may test a support at 2,477 ringgit per tonne, a break below which could cause a loss to 2,450 ringgit, according to Reuters market analyst for commodities and energy technicals Wang Tao.