KUALA LUMPUR: Malaysian palm oil futures rose for a second session on Wednesday, with strength in rival edible oils underpinning the market, although low trading volumes capped the gains.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange rose 3 ringgit, or 0.08%, to 3,766 ringgit ($813.92) at closing. The market opened slightly higher on crude oil and Dalian strength, however, trading was lackluster and sideways between 3,775 ringgit to 3,785 ringgit, a Kuala Lumpur-based trader said. “Trading was thin as most players are still on holiday.” Dalian’s most-active soyoil contract ticked up 1.29%, while its palm oil contract rose 1.56%. Soyoil prices on the Chicago Board of Trade were up 0.21%.
Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market. Oil prices stabilised on Wednesday after the previous day’s strong gains as investors monitored Red Sea developments, with some major shippers resuming passage through the trade route despite continued attacks and broader Middle East tensions.
Weaker crude oil futures make palm a less attractive option for bio-diesel feedstock. The ringgit rose 0.15% against the dollar, making the commodity more expensive for buyers holding foreign currency. Exports of Malaysian palm oil products from Dec. 1-25 were estimated to be down between 4% and 16% from the previous month, according to data from surveyors Intertek Testing Services and AmSpec Agri Malaysia.
Malaysia maintained its January export tax for crude palm oil at 8% and raised its reference price, according to a circular on the Malaysian Palm Oil Board website.
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