KUALA LUMPUR: Malaysian palm oil futures firmed on Thursday, supported by news that top producer Indonesia is planning to restrict exports of the edible oil, although gains were limited by expectation that cargo surveyor data would show a sharp drop in exports.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 50 ringgit, or 0.98%, to 5,174 ringgit ($1,236.91) a tonne by the midday break, rising for a second consecutive session. It had gained 0.57% overnight.
Prices are still holding well on rumours of Indonesia cutting some exports, a Kuala Lumpur trader said.
Indonesia's biggest palm oil association, GAPKI, said on Wednesday the government was currently drafting a plan aimed at limiting shipments of the edible oil to tame domestic cooking oil prices, remarks the Trade Ministry swiftly denied.
To control prices, the ministry said on Tuesday it would require exporters to obtain shipment approval for exports of crude palm oil, used cooking oil and refined, bleached and deodorized palm olein.
Palm oil rises nearly 2pc on crude rally, Indonesian policy
Cargo surveyors are scheduled to release export data for Jan. 1-20 later in the day, with investors expecting a 36% monthly decline.
Dalian's most-active soyoil contract gained 1.2%, while its palm oil contract rose 0.7%. Soyoil prices on the Chicago Board of Trade were up 0.2% after jumping 2.8% overnight.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil steadied as strong demand and short-term supply disruptions continued to support prices close to their highest levels since late 2014, making palm a more attractive option for biodiesel feedstock.
Palm oil may retest a support at 5,106 ringgit, as it faces a resistance at 5,174 ringgit per tonne, Reuters technical analyst Wang Tao said.
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