KUALA LUMPUR: Malaysian palm oil futures extended gains for a second consecutive session on Tuesday, supported by stronger rival Dalian palm olein following China’s recent stimulus measures.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange were up 0.72%, to 3,910 ringgit ($910.36) a metric ton at the close.
Crude palm oil futures climbed on positive market sentiment in the Dalian palm olein market and on the back of overnight gains in Chicago soybean oil, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
“The Dalian palm olein prices are up mainly because of the raft of stimulus measures announced by the Chinese government which is lifting sentiment in the market,” he said.
Dalian’s most-active soyoil contract rose 0.49%, while its palm oil contract added 1.25%. Soyoil prices on the Chicago Board of Trade were down 0.3%. 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 0.19% against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies.
Oil prices steadied due to uncertainty in US-Iran negotiations and Russia-Ukraine peace talks, while new government data delivered a cautious outlook for top crude-importer China’s economy.
Cargo surveyors estimated that exports of Malaysian palm oil products during May 1-20 rose between 1.6% and 5.3%, compared with the same period a month ago.
Malaysia has lowered its June crude palm oil reference price to a level which places it within the 9.5% export duty range, a circular on the Malaysian Palm Oil Board website showed.
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