KUALA LUMPUR: Malaysian palm oil futures gained on Monday as higher rival oil prices supported the market, with traders assessing the impact of Indonesia’s move to reinstate a domestic sales policy.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 58 ringgit, or 0.95%, to 6,167 ringgit ($1,405.10) a tonne during early trade.
Palm oil may rise to 6,602 ringgit
Fundamentals
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Indonesia will reimpose a domestic sales requirement on palm oil, the government said last week after the world’s biggest producer of the key edible oil reversed a ban on its exports.
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Indonesia’s resumption of exports will not blunt Malaysia’s competitiveness in exporting the edible oil, the Malaysian commodities minister said on Sunday, pointing to the rival’s loss of sales in India.
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Exports from Malaysia during May 1-20 rose between 28% and 32.6% from the same week in April, cargo surveyors said last week.
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Dalian’s most-active soyoil contract rose 1.2%, while its palm oil contract gained 1.8%. Soyoil prices on the Chicago Board of Trade were up 0.2%.
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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 retest a resistance at 6,354 ringgit per tonne, as the bounce from the May 20 low of 5,925 ringgit looks incomplete, Reuters technical analyst Wang Tao said.
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