KUALA LUMPUR: Malaysian palm oil futures traded in a tight range on Wednesday, as stronger Dalian palm olein prices provided support to the market while weaker soyoil prices capped gains.
The benchmark palm oil contract for May delivery on the Bursa Malaysia Derivatives Exchange gained 1 ringgit, or 0.02%, to 4,489 ringgit ($1,014.23) a metric ton at the close. The contract fell 2.96% in the last two sessions.
The recovery in Dalian palm olein is benefiting crude palm oil prices, with the spot month March contract holding firm and providing additional price support, a Kuala Lumpur-based trader said.
Dalian’s most-active soyoil contract fell 0.73%, while its palm oil contract gained 0.92%. Soyoil on the Chicago Board of Trade fell 0.17%.
Palm oil tracks movements of rival edible oils as it competes for a share of the global vegetable oils market.
Oil prices edged up, buoyed by a weaker dollar, but mounting fears of a U.S. economic slowdown and the impact of tariffs on global economic growth capped gains.
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Stronger crude oil futures make palm a more attractive option for biodiesel feedstock.
The ringgit, palm’s currency of trade, weakened 0.36% against the U.S. dollar, making the commodity cheaper for buyers holding foreign currencies.
India’s palm oil imports in February jumped 35.7% on-month to 373,549 metric tons, the Solvent Extractors’ Association of India (SEA) said.
Prices of cooking oil could be pulled up for years by stagnating production and a biodiesel push in top producer Indonesia that are making traditionally cheap palm oil costlier, eliminating an advantage that also curbed prices of rival oils.
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