KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday after a near 2% drop in the previous session, as heavy rains in the world’s second-largest producer added to supply restraints.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 35 ringgit, or 0.85%, to 4,177 ringgit ($931.53) by the midday break.
The Malaysian Meteorological Department issued a danger-level continuous rain warning for Pahang, Negeri Sembilan, Melaka and Johor and warned of continuous rains in other parts of the country, state media Bernama reported.
Further supporting prices, major markets India and China may need to replenish their edible oil stockpile in the coming months, and any adverse weather in India will add concerns about its domestic edible oil production, said Sandeep Singh, director of The Farm Trade, a Kuala Lumpur-based consulting and trading firm.
Palm oil falls over 2pc on slow pace of exports
“(The) upcoming Bursa Malaysia Palm Oil Conference will keep prices volatile as the market awaits for forecasts and insights from top analysts,” he added.
Dalian’s most-active soyoil contract rose 0.1%, while its palm oil contract gained 0.2%. Soyoil prices on the Chicago Board of Trade were up 1.3%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Oil prices rose for a second day as reports of expanding manufacturing activity in China boosted the outlook for global fuel demand, making palm a more attractive option for biodiesel feedstock.
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