JAKARTA: Malaysian palm oil futures looked set to post an annual gain of about 21% on Tuesday, snapping two consecutive years of losses, although the market traded lower for the day due to a lack of fresh buying at the year-end.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange fell 53 ringgit, or 1.16%, to 4,498 ringgit ($1,007.17) a metric ton by the midday break.
“The futures were seen trading sharply lower today on lack of fresh buying from destination markets,” said Anilkumar Bagani, research head at Sunvin Group, a Mumbai-based vegetable oil brokerage. Dalian’s most-active soyoil contract gained 0.05% and its palm oil contract lost 1.32%.
Soyoil prices on the Chicago Board of Trade inched lower by 0.05%.
Palm oil tracks price movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices rose in early trade after data showed China’s manufacturing activity expanded in December, but for a second consecutive year oil was on track to end lower due to demand concerns in top consuming countries.
Heavy rains to hit Malaysian palm oil output
Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, rose 0.13% against the US dollar, making the commodity more expensive for buyers holding foreign currencies. Cargo surveyors estimated Malaysian palm oil exports during Dec. 1-25 dropped 1.1%-4% from a month earlier.
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