Palm oil edges up tracking soyoil, on signs of improving exports

KUALA LUMPUR: Malaysian palm oil futures inched up on Tuesday for a second consecutive day, lifted by higher rival soyoil and crude, while signs of low inventory and improving exports further boosted sentiment.

The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 38 ringgit, or 1.02%, to 3,777 ringgit ($914.09) a tonne during early trade.

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Sri Lanka on Monday banned imports of palm oil and new palm plantations, and told producers to uproot existing plantations in a phased manner, in a surprise move that baffled the edible oil industry.

Malaysia's palm oil inventories likely inched higher by the end of March as production advanced for the first time in six months, though a surge in exports kept supply tight, a Reuters survey showed on Monday.

Palm oil exports from Malaysia during April 1-5 rose 10.6% from the same period in March, cargo surveyor Intertek Testing Services said on Monday.

Dalian's most-active soyoil contract gained 1.8%, while its palm oil contract were up 0.8%. Soyoil prices on the Chicago Board of Trade rose 0.5%.

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

Oil prices rose as a drop in the US dollar made crude a more attractive buy, paring losses of more than 4% incurred overnight on the prospect of producers returning more than 2 million barrels per day of supply to the market by July.

Palm oil may break a support at 3,687 ringgit per tonne and retreat to the next support at 3,610 ringgit, Reuters technical analyst Wang Tao said.