KUALA LUMPUR: Malaysian palm oil futures climbed on Wednesday to end a four-session losing streak, as upbeat exports in the first half of March and a recovery in broader markets supported prices.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange ended 259 ringgit higher, or 4.46%, at 6,064 ringgit ($1,445.36) a tonne.
Exports of Malaysian palm oil products for March 1 to 15 rose between 13.2% and 15.6% from the same period in February, cargo surveyors data showed on Tuesday.
However, gains were capped by higher production outlook after the Southern Peninsula Palm Oil Millers’ Association estimated March 1 to 15 output to rise 33% from the month before, according to traders.
Palm extends losses to a fourth day on weaker crude, China’s COVID outbreak
Top producer Indonesia on Tuesday announced it would remove retail price caps for packaged cooking oil and subsidise bulk sales to try to ensure supply at retail markets after previous price controls resulted product scarcity.
The market had expected Indonesia to announce a relaxation in its Domestic Market Obligation, which requires companies to sell 30% of their planned exports domestically, but the policy remains intact.
Some of the bearishness in the palm oil market sentiment has 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 was up 1.5%. Soyoil prices on the Chicago Board of Trade gained 0.8%.
In key palm importer China, the spread of the highly infectious Omicron COVID-19 variant this month has led to movement controls across the country, raising concerns over demand for the edible oil.
The queues of container ships outside major Chinese ports are lengthening by the day as COVID-19 outbreaks in manufacturing export hubs threaten to unleash a fresh wave of global supply chain shocks, ship owners, logistics firms and analysts said.
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