KUALA LUMPUR: Malaysian palm oil futures settled higher on Wednesday, buoyed by stronger rival Dalian edible oils, while traders were optimistic about the potential resumption of palm oil demand from India.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 24 ringgit, or 0.56%, to 4,332 ringgit a metric ton at the close. The contract dropped 1.35% on Tuesday.
Market participants are optimistic about India resuming palm oil purchases to replenish its stocks after the country’s palm oil imports hit multi-year lows in January, said Anilkumar Bagani, commodity research head at Mumbai-based Sunvin Group.
“The broader positive trade in Chinese vegetable oils during Asian hours was also a factor behind some strength seen in crude palm oil futures,” Bagani said.
Dalian’s most-active soyoil contract rose 2.97%, while its palm oil contract added 3.04%. Soyoil prices on the Chicago Board of Trade shed 0.7%.
Palm ends lower on weakness in Chicago soyoil
Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market.
India’s palm oil imports in January plunged to their lowest in nearly 14 years as refiners replaced the tropical oil with cheaper rival soyoil due to negative refining margins for palm oil, five dealers said.
Malaysia’s palm oil inventories are likely to have dropped in January to their lowest levels in nearly two years, as adverse weather disrupted production, although lower exports offset some of the decline, a Reuters survey showed.
European Union soybean imports so far in the 2024-25 season that started in July 2024 reached 8.27 million metric tons by Feb. 2 compared with 7.32 million tons a year earlier.
The EU palm oil imports slid to 1.69 million tons from a year-ago 2.14 million tons, data published by the European Commission showed.
The ringgit, palm’s currency of trade, strengthened 0.29% against the U.S. dollar, making the commodity more expensive for buyers holding foreign currencies.
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