KUALA LUMPUR: Malaysian palm oil futures rose on Wednesday, buoyed by strong export demand ahead of a key festival in top buyer India, although gains were limited by forecasts of higher production.
The benchmark palm oil contract for December delivery on the Bursa Malaysia Derivatives Exchange rose 17 ringgit, or 0.45%, to 3,754 ringgit ($822.34) a tonne by the midday break, extending gains to a second session.
Exports of Malaysian palm oil products for Sept. 1-20 rose 32.7% to 952,888 tonnes from 718,291 tonnes shipped during Aug. 1-20, cargo surveyor Societe Generale de Surveillance (SGS) said.
SGS data also showed shipments to India surged 50% during the period as the world’s biggest edible oil buyer ramped up purchases ahead of the Diwali festival next month. Malaysia is in the peak harvest season and production is expected to rise this month.
The current increase in open position from over the past week is a litmus test of the overall production fear both in Malaysia and Indonesia, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari. Dalian’s most-active soyoil contract rose 1.5%, while its palm oil contract gained 1.6%.
Soyoil prices on the Chicago Board of Trade were down 0.1%. Palm oil is affected by price movements in related oils as they compete for a share in the global vegetable oils market.
Palm oil may retest a resistance at 3,796 ringgit per tonne, a break above which could lead to a gain into 3,847-3,897 ringgit, Reuters technical analyst Wang Tao said.