JAKARTA: Malaysian palm oil futures rose for the second straight session on Thursday, tracking strength in the Dalian market, as China makes a shift to buying palm oil amid a trade war with Canada.
The benchmark palm oil contract for June delivery on the Bursa Malaysia Derivatives Exchange gained 54 ringgit, or 1.27%, to 4,313 ringgit ($973.81) a metric ton at closing.
“Palm prices are supportive due to the ongoing China-Canada trade traffic on canola oil. China has, therefore, shifted to buying palm,” a Kuala Lumpur-based trader said.
Palm oil contract on the Dalian Commodity Exchange gained 0.54%, while its most-active soyoil contract was up 0.48%. Soyoil prices on the Chicago Board of Trade (CBOT) were up 0.72%.
Indonesia raised its crude palm oil reference price for April to $961.54 a metric ton. The new price will leave the export tax for April unchanged at $124 a ton.
The country also currently imposes a 7.5% levy for CPO exports and a levy for more refined palm oil products of between 3% and 6% of the reference price.
Indonesia’s palm oil inventory at the end of January rose by 13.98% from the previous month despite a drop in production as exports fell to a four-month low, data from the Indonesian Palm Oil Association (GAPKI) showed on Thursday.
Meanwhile, exports of Malaysian palm oil products for March 1-25 dropped 8.1% to 835,732 metric tons month-on-month, cargo surveyor Intertek Testing Services said on Tuesday, while independent inspection company AmSpec Agri Malaysia estimated exports to have fallen 8.5% in the same period.
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