KUALA LUMPUR: Malaysian palm oil futures settled higher on Tuesday, rebounding from earlier losses, though sluggish demand from key markets, uncertainty over Indonesia’s export rates and a slight improvement in domestic production capped its gains.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 64 ringgit, or 1.52%, to 4,282 ringgit ($975.84) a metric ton at the close.
The contract rose 0.67% in the last two sessions. Crude palm oil futures were pressured by a slight recovery in palm production as well as the uncertainty over Indonesia’s export levy rates, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin group.
Bagani said trading volume was thin due to the Lunar New Year holidays in China and weak destination demand from key markets. Soyoil prices on the Chicago Board of Trade were up 0.78%. The Dalian Commodity Exchange is closed from Jan. 28 to Feb. 4 for the Lunar New Year holidays.
Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The ringgit, palm’s currency of trade, weakened 0.3% against the dollar, making the commodity cheaper for buyers holding foreign currencies.
Oil prices edged higher but remained near a two-week low, as weak economic data from China and rising temperatures elsewhere dampened the demand outlook.
Brazil’s 2024/25 soybean crop is expected to total 171 million metric tons, agribusiness consultancy AgRural said, cutting its forecast by 500,000 tons due to lower yields in the states of Mato Grosso do Sul, Parana and Rio Grande do Sul.
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