SINGAPORE: Malaysian palm oil futures rose for a second session on Tuesday, buoyed by low production and signs of an increase in Chinese soy demand, although easing exports capped the gains.
The benchmark palm oil contract for February delivery on the Bursa Malaysia Derivatives Exchange rose 18 ringgit, or 0.5%, to 3,952 ringgit ($844.81) a metric ton at closing.
“This month, there has been low production in Malaysia, and robust demand for biodiesel has kept the market firm. Strong prices of rival soyoil has supported the market,” said Mitesh Saiya, trading manager at Mumbai-based trading firm Kantilal Laxmichand and Co.
China’s soybean imports from Brazil rose 71% in October from a year earlier, data showed on Monday, boosted by cheaper prices following robust harvest.
Dalian’s most-active soyoil contract was down 0.4%, while its palm oil contract was down 0.7%. Soyoil prices on the Chicago Board of Trade fell 1%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Exports of Malaysian palm oil products for Nov. 1-Nov. 20 were seen down around 2% compared with the same period a month ago, data from cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia showed on Monday.
Indonesian exports of palm oil in September were down 21% from the same month last year, data from the Indonesia Palm Oil Association (GAPKI) showed on Tuesday.
The Malaysian ringgit, palm’s currency of trade, strengthened 0.3% against the dollar, making the commodity less attractive for foreign currency holders.
Fitch Ratings predicted crude palm oil prices will be significantly lower in 2024 as output could rise due to favourable weather.
The Roundtable on Sustainable Palm Oil (RSPO) said on Tuesday it is developing a new system to trace palm’s origin and environmental credentials in response to demands by buyers for proof of sustainability.