SINGAPORE: Malaysian palm oil futures rose for a fourth consecutive session on Monday to hit a more than three-week high, buoyed by improved demand prospects from top consumer Indonesia, although weaker exports limited gains.
The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange rose 19 ringgit, or 0.49%, to 3,886 ringgit ($894.98) a metric ton as of 0235 GMT.
Palm oil rises on supply concern
The contract hit an intraday high of 3900 ringgit, its strongest level since Aug. 2.
Fundamentals
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Exports of Malaysian palm oil products for Aug. 1-25 fell 14.9% to 1,055,768 tons, from 1,240,593 tons shipped during July 1-25, cargo surveyor Intertek Testing Services said on Sunday.
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Independent inspection company AmSpec Agri Malaysia said Malaysia’s palm oil product exports declined 14.05% to 1,008,418 tons, from 1,173,224 tons over the same period last month.
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Indonesia plans to implement biodiesel containing a mandatory 40% blend of palm oil-based fuel starting Jan. 1, next year, a senior official at its energy ministry, Eniya Listiani Dewi, said last Thursday.
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Dalian’s most-active soyoil contract ticked up 0.3%, while its palm oil contract climbed 1.26%. Soyoil prices on the Chicago Board of Trade dipped 0.17%.
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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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Oil prices extended gains on fears a major spillover in fighting from the Gaza conflict into the Middle East could disrupt regional oil supplies, while imminent US interest rate cuts lifted the global economic and fuel demand outlook.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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The Malaysian ringgit, palm’s currency of trade, strengthened 0.69% against the dollar. A stronger ringgit makes palm oil less attractive for foreign currency holders.
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Palm oil may test resistance of 3,892 ringgit per metric ton, a break above which could confirm a target range of 3,909 ringgit to 3,927 ringgit, said Reuters technical analyst Wang Tao.
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