KUALA LUMPUR: Malaysian palm oil futures rose more than 2% on Tuesday, lifted by strength in crude oil futures, and as surveys indicated tight end-March inventories in the world’s second largest producer.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange rose 147 ringgit, or 2.58%, to 5,839 ringgit ($1,384.96) a tonne in early trade, extending gains to a second session.
Fundamentals
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Oil futures rose as the potential for more sanctions following alleged war crimes by Russian troops in Ukraine added to concerns about supply disruptions. * Stronger crude futures make palm a more attractive option for biodiesel feedstock.
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Malaysia’s production in March was seen expanding 16.4% month-on-month to a three-month peak of 1.32 million tonnes, a Reuters survey showed on Monday.
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However, rising exports and lower imports likely offset production, keeping end-March inventories tight at 1.53 million tonnes - a 0.5% uptick from the previous month, according to the survey.
Palm oil ends three days of losses
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Soyoil prices on the Chicago Board of Trade rose 0.4% after a 1.6% overnight gain. The Dalian exchange was closed for a public holiday.
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Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
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Palm oil may gain more into a range of 5,855-5,966 ringgit per tonne, as suggested by a projection analysis, Reuters technical analyst Wang Tao said.
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