KUALA LUMPUR: Malaysian palm oil futures settled higher on Tuesday, rebounding from earlier losses, though weaker soyoil prices and muted export demand capped gains.
The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange gained 35 ringgit, or 0.81%, at 4,373 ringgit ($975.03) a metric ton at the close. The contract had lost 0.69% in the previous session.
Crude palm oil was weighed down by weaker soybean oil prices during Asian hours as well as sluggish export pace, which pressured prices, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Exports of Malaysian palm oil products for December fell between 2.5% and 7.8%, according to cargo surveyor Intertek Testing Services and independent inspection company AmSpec Agri Malaysia.
Dalian’s most-active soyoil contract rose 0.08%, and its palm oil contract gained 1.94%. Soyoil prices on the Chicago Board of Trade were down 0.07%.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Palm slips on poor demand from India
Oil prices fell slightly on Tuesday as optimism over demand faded, although tighter Russian and Iranian supply driven by expanding Western sanctions checked losses.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, strengthened 0.51% against the dollar, making the commodity more expensive for buyers holding foreign currencies.
Malaysia’s palm oil inventories are forecast to fall in December, a third consecutive month of drop, amid declining production due to recent heavy rainfall that affected the harvest, a Reuters survey showed.
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