KUALA LUMPUR: Malaysian palm oil futures rose more than 1percent to a seven-week high on Wednesday, as anticipation of stronger demand for the Lunar New Year holidays boosted the market.
The benchmark palm oil contract for April delivery on the Bursa Malaysia Derivatives Exchange gained 60 ringgit, or 1.47percent, to 4,154 ringgit (USD1,026.69) a metric ton, the highest close since December 2. Crude palm oil futures traded higher amid expectations of strong demand in the coming weeks ahead of the Lunar New Year festive season next month, said David Ng, a proprietary trader at Kuala Lumpur-based trading firm Iceberg X Sdn Bhd.
Cargo surveyors estimated exports of Malaysian palm oil products for January 1-20 have risen between 8.64percent and 11.4percent month-on-month. Dalian’s most-active soyoil contract firmed 0.25percent, while its palm oil contract added 1.28percent.
Soyoil prices on the Chicago Board of Trade were up 0.61percent. Palm oil tracks the price movements of rival edible oils as it competes for a share of the global vegetable oils market. Oil prices fell as an expected build-up of US crude inventories outweighed a temporary halt in output at two large fields in Kazakhstan and geopolitical pressure from US threats of tariffs over its bid to gain control of Greenland.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock. The ringgit, palm’s currency of trade, strengthened 0.2percent against the dollar, making the commodity slightly expensive for buyers holding foreign currencies and capping further gains. Palm oil prices in February are expected to remain rangebound between 4,000 ringgit and 4,300 ringgit (USD987-USD1,061) per ton, supported by seasonal declines in production and stocks, the Malaysian Palm Oil Council said.
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