Palm edges up as rival oils gain, exports strengthen

SINGAPORE: Malaysian palm oil futures edged up on Wednesday as rival oils on the Dalian gained, while a rise in exports for the first half of December also supported prices.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 13 ringgit, or 0.4pc, to 3,368 ringgit ($831.81).

"External markets supported prices," a Kuala Lumpur-based trader told Reuters. "Underlying fundamentals like good export figures coupled with negative production growth also helped."

Dalian's most-active soyoil contract rose 1.7pc, while its palm oil contract gained 0.8pc. Soyoil prices on the Chicago Board of Trade were flat.

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

Also supporting prices were higher exports amid a supply crunch.

Exports of Malaysian palm oil products for Dec. 1 to 15 rose 9.5pc to 725,380 tonnes from 662,376 tonnes shipped during Nov. 1 to 15, cargo surveyor Societe Generale de Surveillance said late on Tuesday.

Malaysia's palm oil end-stocks in November fell to a more than three-year low as production slumped and exports fell more than expected, data released by the Malaysian Palm Oil Board last week showed.

Limiting gains, however, was Indonesia potentially lowering its palm oil biofuel allocation for 2021 as the government adopted a more cautious fuel consumption outlook for next year, an official at the National Energy Council said on Wednesday.

Indonesia makes it compulsory for its diesel to be blended with 30pc biocontent made out of palm oil, as it seeks to be less dependent on fuel imports and sop up palm supply.