Palm hits 7-week high tracking soyoil; weak Feb exports weigh

KUALA LUMPUR: Malaysian palm oil futures rose to a seven-week high on Monday on the back of a rally in rival oilseeds, but cargo surveyor data showing a decline in February exports capped gains.

The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 50 ringgit, or 1.34%, to 3,792 ringgit ($936.07) a tonne by the midday break, hitting its highest since Jan. 11. The contract had earlier risen as much as 2%.

Palm futures are borrowing strength from external markets, mainly soyoil and refined palm olein futures on the Chicago Board of Trade (CBOT) and the Dalian Commodity Exchange (DCE) and rapeseed oil on the Zhengzhou Commodity Exchange, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.

Exports of Malaysian palm oil products in February fell 8.15% from January to 1 million tonnes, according to AmSpec Agri Malaysia.

"The low Feb arrivals of palm oil in India has put pressure on importers to step up purchases to cover for upcoming Ramadan demand," Bagani said.

Output in Malaysia - the world's second-largest producer of palm oil - is seen increasing as Southern Peninsula Palm Oil Millers' Association (SPPOMA) estimated Feb. 1-25 production to rise by 19.78%, he added.

Dalian's most-active soyoil contract rose 3.1%, while its palm oil contract climbed 2.1%. Soyoil prices on the CBOT were up 0.9%.

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

Palm oil may fall into a range of 3,624-3,673 ringgit per tonne, as it could have completed a bounce from the Jan. 20 low of 3,160 ringgit, Reuters technical analyst Wang Tao said.