Palm rises over Indonesia export control rumours
- Dalian’s most-active soyoil contract gained 1.67%
JAKARTA: Malaysian palm oil futures extended gains to a third straight session on Tuesday over rumours that Indonesia, the world’s biggest exporter, was considering new export controls on the commodity, while stronger Dalian edible oils also lent support.
The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange rose 53 ringgit, or 1.17%, to 4,587 ringgit a metric ton at closing. The contract rose as much as 2.23% in the afternoon session.
Indonesia’s main index continued a week-long slump on Tuesday, with extra pressure piled on mining and oil palm grower stocks as traders responded to rumours that the government was considering new export controls on strategic commodities, including palm, in a bid to limit capital flows.
Reuters could not confirm the rumour.
“If the rumour comes true, demand will shift to Malaysia, which will support pricing,” a Kuala Lumpur-based trader said, adding that the rumour has supported price in the afternoon session.
Dalian’s most-active soyoil contract gained 1.67%, while its palm oil contract rose 1.76%. Soyoil prices on the Chicago Board of Trade were down 0.42%.
Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market.
Crude palm oil prices are expected to hold around 4,400 ringgit ($1,110) per metric ton in June as global biofuel policies support demand, while weather risks add to supply uncertainty, the Malaysian Palm Oil Council said in a statement on Tuesday.
Palm oil may test a resistance at 4,584 ringgit per metric ton, a break above which could open the way towards the 4,634 to 4,669 ringgit range.
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