KUALA LUMPUR: Malaysian palm oil futures rose on Monday, after two sessions of decline, supported by stronger crude oil and Chicago soyoil.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange gained 37 ringgit, or 0.82%, to 4,290 ringgit ($998.37) a metric ton in early trade.
Malaysian palm oil futures snaps two-day losing
The contract fell 1.3% in two consecutive sessions.
Fundamentals
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Dalian’s most-active soyoil contract fell 0.56%, while its palm oil contract shed 0.74%. Soyoil prices on the Chicago Board of Trade were up 0.57%.
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Palm oil tracks prices of rival edible oils as they compete for a share of the global vegetable oils market.
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Oil prices steadied in early trading, following a more than 7% drop last week on demand worries in China, the world’s top oil importer, and an easing of concerns over potential supply disruptions in the Middle East.
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Brent crude futures for December were up 0.25% at $73.24 a barrel, as of 0242 GMT. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
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The ringgit, palm’s currency of trade, strengthened 0.12% against the US dollar, making the commodity more expensive for buyers holding foreign currencies.
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Cargo surveyor Intertek Testing Services estimated that exports of Malaysian palm oil products rose 8.7% during Oct. 1-20, while AmSpec Agri Malaysia’s data is expected later in the day.
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Malaysia plans to raise the threshold for a windfall profit levy (WPL) on palm oil and will revise the export duty for crude palm oil, Prime Minister Anwar Ibrahim said.
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A higher WPL will reduce the pressure of the increase in the cost of palm oil production, the Malaysian Palm Oil Board said, according to state news agency Bernama, while export tax adjustments will help the palm oil refining industry get similar advantages compared to Indonesia in the downstream segment, Glenauk Economics said.
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