KUALA LUMPUR: Malaysian palm oil futures edged higher on Tuesday as trading resumed after a long weekend, with concerns over lower end-May inventories supporting the market while traders awaited details on Indonesia’s export levy adjustment.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange gained 34 ringgit, or 0.53%, to 6,487 ringgit ($1,476.00) a tonne by the midday break, rising for a fourth session in five.
Lower Malaysian stockpiles and slow resumption of exports from Indonesia supported palm prices, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari.
Higher soybean oil and crude oil prices also lent support to the contract, he added.
A Reuters survey released on Friday pegged end-May inventories in Malaysia to drop 6% from the month before to 1.54 million tonnes due to slow output and a surge in exports.
Adding to the output concerns, the Malaysian Estate Owners’ Association on Monday said planters could suffer more production losses due to a shortage of about 120,000 workers.
Meanwhile, Indonesia adjusted its palm oil export levy, a senior official at the economic ministry said on Sunday, without giving details.
Palm oil eases as Indonesia gears up to resume exports
The world’s biggest producer has issued around 302,000 tonnes of palm oil export permits since it restarted exports.
Top buyer India’s palm oil exports in May were its highest in seven months and up 15% on April as the country overcame curbs on Indonesian exports by sourcing more of the commodity from Malaysia, Thailand and Papua New Guinea, five industry officials said.
Dalian’s most-active soyoil contract rose 0.7%, while its palm oil contract gained 0.8%.
Soyoil prices on the Chicago Board of Trade were up 0.3%. Palm oil may test a support at 6,386 ringgit per tonne, a break below which could trigger a drop to a range of 6,204-6,317 ringgit, Reuters technical analyst Wang Tao said.
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