KUALA LUMPUR: Malaysian palm oil futures firmed on Thursday for a second consecutive session, tracking gains in rival edible oils, although concerns over demand lingered.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange closed up 21 ringgit, or 0.54%, to 3,888 ringgit ($902.93) a tonne.
Trading volumes are lower than usual for Malaysian palm oil, and Chinese vegetable oil futures are experiencing a liquidation of positions due to the upcoming Chinese New Year holidays, said Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group.
Exports of Malaysian palm oil products for Jan. 1-15 fell between 28% and 37%, from the same period last month, due to a tumble in shipments to key markets India and China, cargo surveyors said this week.
Palm oil prices in 2023 are set to average at 3,800 ringgit a tonne, down from from last year’s record of 4,910 ringgit, a Reuters poll showed.
Production in Indonesia is forecast to rise 2.4% to 48 million tonnes this year, while Malaysia’s production is seen 3% higher at 19 million tonnes.
Indonesia plans to launch a crude palm oil benchmark price by June, the country’s trade minister said.
Dalian’s most-active soyoil contract gained 1.1%, while its palm oil contract rose 0.4%. Soyoil prices on the Chicago Board of Trade were down 0.02%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices fell after industry data showed a large unexpected increase in US crude stocks for a second week, heightening concerns of a drop in fuel demand.
Weaker crude futures make palm a less-attractive option for biodiesel feedstock.
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