MUMBAI: Malaysian palm oil futures were flat in morning trade on Wednesday, hovering near their lowest level in more than two weeks, as higher stocks and a drop in rival soyoil prices offset rising exports and concerns over production.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange edged up 2 ringgit, or 0.05%, to 4,068 ringgit ($897.02) a tonne by the midday break.
Malaysia’s palm oil stocks at the end of October expanded for a fifth month to a three-year high as production improved, data from the nation’s palm oil board showed on Friday.
Exports from Malaysia, the world’s second-largest producer, rose between 10.7% and 12.7% in the Nov. 1-15 period, compared to the same weeks in October, cargo surveyors data showed.
The market has been struggling to adjust with volatile Malaysian ringgit and uncertainty over vegetable oil supplies because of La Nina and sunflower oil shipments from Black Sea region, said a Mumbai-based trader with a global trade house.
“It seems palm is consolidating gains. For time being it would remain rangebound and then could move higher since inventories in Indonesia are falling,” he said.
Palm oil inches higher on demand optimism, firm ringgit caps gains
The ringgit, palm’s currency of trade, eased against the dollar, making the commodity more cheaper for holders of other currencies.
Disruptions to palm oil supplies due to tropical storms in top producers Indonesia and Malaysia are expected to continue into the first quarter of 2023, keeping prices strong, the Malaysian Palm Oil Board (MPOB) said on Monday.
Soyoil prices on the Chicago Board of Trade were down 0.75%. 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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