KUALA LUMPUR: Malaysian palm oil futures snapped a four-session losing streak to climb on Wednesday, as upbeat exports for the first half of March and a recovery in broader markets underpinned prices.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 145 ringgit, or 2.5%, to 5,950 ringgit ($1,417.34) a tonne by the midday break. The contract rolled over to a new month.
Exports of Malaysian palm oil products for Mar. 1-15 rose between 13.2% and 15.6% from the same period in February, cargo surveyors data showed on Tuesday.
Top producer Indonesia on Tuesday announced it will remove retail price caps for packaged cooking oil and will subsidise bulk sales to try to ensure supply at retail markets after previous price controls resulted in a scarcity.
The market had expected Indonesia to announce a relaxation of its Domestic Market Obligation - which requires companies to sell 30% of their planned exports domestically - but the policy remains in tact.
Thus, some of the bearishness in the palm oil market sentiments have evaporated, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
“Global agriculture markets are showing huge volatility due to the war effects and sanctions on Russia,” Bagani said.
Dalian’s most-active soyoil contract rose 1.1%, while its palm oil contract were up 1.6%. Soyoil prices on the Chicago Board of Trade gained 0.2%.
Oil prices rose, bouncing back after earlier falling more than $1 a barrel, as Russia’s invasion of Ukraine continues to dominate volatile trading with ceasefire talks the latest market trigger.
Stronger crude futures make palm a more attractive option for biodiesel feedstock.
Palm oil may bounce into a range of 6,548 ringgit to 6,686 ringgit per tonne, following the completion of a wave c from 7,268 ringgit, Reuters technical analyst Wang Tao said.
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