SINGAPORE: Malaysian palm oil futures were little changed on Friday, as concerns over lower supply outweighed worries over a dip in edible imports to India and falling Chinese demand.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange last traded at 3,784 ringgit ($798.82) a metric ton at the midday break.
The benchmark contract has gained 0.2% so far in the week, and is headed for its fourth consecutive weekly rise. “Tight supply of palm oil is reflected in forward prices when compared to the prices of other edible oils,” said Pranav Bajoria, a director at Singapore-based brokerage Comglobal.
Indonesia will continue its domestic market obligation (DMO) for palm oil into 2024 to maintain the price stability of cooking oil, Trade Ministry official Isy Karim said on Thursday. The policy was imposed last year to control soaring prices. Producers can export only once they have sold a portion domestically.
India’s edible oil imports in October plunged to their lowest level in 16 months as higher stocks prompted refiners to curtail purchases of edible oils, six dealers told Reuters.
India is the top importer of vegetable oils, and lower purchases could push up palm oil stockpiles in other key producers. “Demand from China, which typically participates in forward purchasing, is showing a lack of substantial coverage for December,” Pranav added.
China’s services activity expanded at a slightly faster pace in October, a private-sector survey showed, with sales growing at the softest rate in 10 months.
Dalian’s most-active soyoil contract rose 1.6%, while its palm oil contract was up 1.7%. Soyoil prices on the Chicago Board of Trade climbed 0.5%. 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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